The oil market could return to balance sooner than expected, as large unplanned production shutdowns reduce oil supplies. The gap between global supply and demand has narrowed to almost zero this quarter, after more than two years of surplus. Argus expects global supply to exceed demand by just 100,000 b/d in April-June, compared with a surplus of over 2mn b/d in the previous six months. Crude prices have been close to $50/ bl, an eight-month high, as the market tightens and US inventories finally start to decline. But a recovery in Canadian oil sands production, concerns over a revival in shale oil output and a large stockpile will limit future gains.
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