OECD oil stocks reached 1.005 bln barrels in April, their highest level in more than 20 years, the energy watchdog of the industrialised, the International Energy Agency (IEA), said in its monthly report for June.  

The Paris-based agency reduced global oil demand growth by 10,000 barrels per day (bpd) to 1.24 million bpd and said high oil prices were continuing to dampen demand growth in the United States, the world's biggest energy consumer.

The IEA expects demand growth in China, the world's second biggest fuel burner, to grow at 8.6 percent in the second quarter before declining to 5.9 percent during the second half of 2006.

The Organisation of the Petroleum Exporting Countries pumped 29.8 million barrels per day in May, up 215,000 bpd from a revised April figure.

The world's top exporter Saudi Arabia pumped 9.35 million barrels per day in May, up 100,000 bpd from April.

It reduced the requirement for the group's oil to 28.8 million bpd in the third quarter and 29.5 million bpd in the fourth quarter.

Highlights from report:

NYMEX WTI futures rose by $0.80/bbl in May to average $70.96/bbl. Prices initially fell alongside a sell-off in global asset markets but later recovered. Prolonged Atlantic Basin refinery maintenance and the start of work in Asia tightened product markets. Strong fundamentals and high crude stocks kept forward prices in contango, NYMEX delivery in a year’s time pricing above $75/bbl in early June.

OECD crude stocks rose to their highest level in 20 years as heavy seasonal maintenance cut refinery throughputs. However in April, total oil stocks cover held even at 54 days in view of seasonally rising crude and product demand. OECD industry oil stocks closed at 2631 mb, up 17 mb from March and 58 mb above last year.

World oil product demand growth is broadly unchanged at 1.24 mb/d in 2006. Recent strength in China and the US is partly offset by weakness in OECD Europe and Asia, but still results in a 160 kb/d upward revision to 2Q demand growth. A booming global economy remains supportive, but high prices are weighing on consumption.

World oil supply rose by 445 kb/d in May to 85.0 mb/d, fuelled by increases from OPEC, a lull in North Sea maintenance and recovering US GOM supply. A higher 2005 baseline contributes to weaker non-OPEC supply growth of 1.1 mb/d (plus 265 kb/d of OPEC NGLs) in 2006, down from 1.2 mb/d last month.

OPEC crude supply rose 215 kb/d in May to 29.8 mb/d, following downward revisions to Iranian and Saudi Arabian April supply. Effective OPEC spare capacity remains below 2 mb/d, with security concerns and pipeline outages impeding 800 kb/d of Iraqi and Nigerian output. The call on OPEC crude and stock change is revised up by 0.3 mb/d to 28.4 mb/d for 2Q, and rises to 29.5 mb/d by the end of the year.