The IEA stated that today, Canada has joined the United States and Brazil in leading the oil and gas production among non-OPEC countries. Currently, the total oil and gas production of non-OPEC countries has increased from 1.7 million barrels per day to 56.4 million barrels per day.
The increase in production has also led to a decrease in Canadian crude oil prices. According to IEA information, Canadian crude oil has struggled to establish a foothold in the market due to high prices in recent years; however, in January of this year, the benchmark price for Canadian heavy oil (WCS) fell below the benchmark price for West Texas Intermediate (WTI) at $20 per barrel. Analysts pointed out that this is the first occurrence of such a situation in the past six months, mainly due to the commencement of operations of certain oil pipelines.
"The advancement of pipeline construction across North America, coupled with increased rail transport, has stabilized crude oil inventories and significantly alleviated the pressure on crude oil demand in the North American continent," the IEA stated in its report.
Additionally, the IEA noted that given BP's refining project in Indiana, USA, which will increase capacity by 405,000 barrels per day, the gap between the two benchmark crude oil prices is expected to narrow in the future.
Meanwhile, the IEA holds an optimistic view on the future global oil supply and demand market, believing that the balance between supply and demand will gradually improve. Compared to last year, the IEA has lowered its forecast for oil demand in 2014 by 1.5% to 92.7 million barrels per day. The U.S. Energy Information Administration (EIA) also predicts that due to simultaneous declines in demand from Europe and Japan, global oil demand is expected to decrease by 10,000 barrels per day.
The IEA also mentioned that the Organization of the Petroleum Exporting Countries (OPEC) saw its average daily crude oil production increase by 500,000 barrels in February. "From a global perspective, we believe this is beneficial for stabilizing global oil prices, as OPEC's oil production has increased compared to previous estimates, despite a slight decline in oil demand," said RBC Capital analyst Leo Mariani. "The IEA's assessment of global oil supply and demand helps to soothe market sentiment."
According to the IEA report, both OPEC and non-OPEC countries performed well in crude oil production in the first quarter of this year. OPEC countries increased their crude oil production by 500,000 barrels per day in February; non-OPEC countries' daily crude oil production surged by 2 million barrels throughout the first quarter. In the same period last year, OPEC's crude oil production was on a decline, and just four months ago, the increase was no more than 300,000 barrels per day.
However, OPEC's assessment of global oil demand differs from that of the IEA and EIA. On March 11, OPEC raised its previous forecast for global oil demand by 50,000 barrels per day and also increased its forecast for crude oil demand from OPEC countries.