Oil Prices Held Steady But Rising Supply Caps Gains

Investing.com – Oil prices stayed flat on Friday morning in Asia after the International Energy Agency (IEA) said global oil demand is expected to pick up this year, but warned supply is growing at a faster pace.

 for April delivery were unchanged at $61.19 a barrel in Asia at ET 8:10PM. for May delivery, traded in London, were up 0.03% at $65.08 per barrel.

Prices were supported by healthy demand along with supply constraints from The Organization of the Petroleum Exporting Countries (OPEC). OPEC has been reducing output by around 1.2 million barrels per day (bpd) since January 2017.

However, non-OPEC supply, led by the U.S., will grow by 1.8 million bpd this year, while demand will only grow by about 1.5 million bpd, according to IEA.

The relentless increase in U.S. crude production hit another record last week at 10.38 million bpd, up by more than 23% since mid-2016. Commercial crude rose by 5 million barrels, at 430.93 million barrels.

This means OPEC is losing market share as it continues to cut output in an effort to prop up prices.

Earlier this week OPEC raised its forecast for non-member oil supply to almost double the growth predicted four months ago.

Meanwhile, the U.S. is expected to overtake Russia as the top producer by late 2018, with output of more than 11 million bpd.

While oil markets are supported by healthy demand, they remain relatively weak. Prices have strayed far from their January highs of almost $67 per barrel for WTI and over $70 for Brent.

Estimates by the Energy Information Administration (EIA) show global supplies will rise above 100 million bpd for the first time in the second quarter of this year, while demand will only surpass that level in the third quarter, implying an oversupplied market.

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