IEA predicts that stockpiles could be critically low before peak summer demand

The head of the International Energy Agency’s oil industry and market division warned on Tuesday that if the current rate of stock 'draws' continues, global oil inventories may reach critical levels before the summer peak.

Toril Bosoni said, "We are seeing stock drawdowns continue into summer and there is a possibility or likelihood that we will reach critical levels?or historic low levels?just ahead of peak demand?summer."

Bosoni, speaking at the S&P Global Energy Middle East Petroleum and Gas Conference held in London, said that a?agreement reached today could take up to six months to reopen Strait of Hormuz in the 'best-case scenario.

This could lead to a second coordinated emergency release by the IEA, but a discussion about this isn't happening at the moment, as only half of 400 million barrels from March have yet reached?the market.

"In any event, emergency stock releases will only be a temporary stopgap measure, and they won't?solve the problem. Bosoni stated that the scale of supply losses is so large that the reduction must come from the demand side. (Reporting and editing by Andrew Heavens, Alexander Smith and Shadia Nasralla from London)

(source: Reuters)