Global oil demand growth for the first quarters of 2016 was revised upwards to 1.4 million barrels per day, led higher by strong gains in India, China and, more surprisingly, Russia. For the year as a whole, growth will be around 1.2 million barrels a day with demand reaching 95.9 million barrels a day.
The International Energy Agency in its latest oil market report on Thursday that a rebalancing of supply and demand was starting to become evident from the existing supply and demand data.
The report which has updated data on supply and demand says global oil supply was starting to look more measured. It says demand was resilient and a surplus of oil could start shrinking later this year.
"Rising by an estimated 1.4 mb/d in first quarter of 2016, and with global growth forecast to hold steady at 1.2 mb/d for the year as a whole; at first glance the global demand outlook looks robust."
The momentum according to the report is underpinned by a relatively benign global macroeconomic environment, based on April's World Economic Outlook from the IMF which depicts global economic growth of 3.2% in 2016.
This strong (first quarter of 2106) performance according to the report might raise expectations that demand will remain at this stronger level causing a an increase in the 2016 figure.
"We might have expected that as oil prices fell sharply in 1Q16 -- to below $30/bbl at one point -- there might be evidence of another growth spurt similar to that seen in the first half of 2015."
Instead, the report notes that a combination of non-price-related factors kept downward pressure on demand, including faltering economic conditions in a number of important consumer countries.
It says global oil supplies rose 250,000 barrels a day in April to 96.2 million barrels a day (mb/d) as higher OPEC output more than offset deepening non-OPEC declines.
The International Energy Agency monthly report however says "world output grew by just 50,000 barrels a day in April versus gains of more than 3.5 million barrels a day a year ago.
"The net result of our changes to demand and supply data is that we expect to see global oil stocks increase by 1.3 million barrels a day (mb/d) in the first half of 2016, followed by a dramatic reduction in the second half of 2016 to 0.2 million barrels a day." said the report.