IEA makes suggestions to balance oil market

Executive director of the International Energy Agency (IEA) Fatih Birol said the recent OPEC+ supply cut was a "solid start" and urged oil producer countries to consider even deeper cuts.

"We continue to see extraordinary turmoil in oil markets, including yesterday's unprecedented collapse in the U.S. benchmark crude price (WTI). With global oil demand this month close to 29 million barrels a day below year-ago levels, there is currently massive oversupply, which is threatening to overwhelm storage capacity in the coming weeks," Birol said in a statement.

Birol recalled that the IEA last week described the current month as "Black April" for the industry and the historic OPEC+ supply agreement is due to take effect on May 1, Anadolu agency reported.

Citing Birol's warning during G20 meeting that the rapid build-up of oil stocks was saturating logistical and storage capacity, which "may lead to more volatility and possibly even negative prices in some regions," the agency pointed to three suggestions.

First, those countries that made the recent decisions should reduce production act as soon as possible and also consider even deeper cuts.

Second, the financial authorities should "consider adopting measures to discourage disorderly market outcomes." 

Third, the countries with strategic oil reserves to make capacity available to help take surplus barrels off the market.