This week, the International Energy Agency published its monthly oil market report for March.  

There were a few notable highlights from the report, including:

• Oil futures prices reversed their upward course in mid-February. By early-March, prices for benchmark Brent crude had fallen to nine-week lows and were last trading around $110/bbl, while WTI was pegged at $93/bbl.
  
• Global oil supply inched up in February by 90 kb/d, to 90.8 mb/d, led by a 150 kb/d hike in OPEC crude, to 30.49 mb/d. Increased Iraqi supply was the main factor behind the OPEC gain. Heavy spring refinery maintenance cut the ‘call on OPEC crude and stock change’ for 2013 by 100 kb/d from last month’s estimate, to 29.7 mb/d.
• Non-OPEC output slipped by 60 kb/d in February to 54.1 mb/d but remained 0.6 mb/d higher than last year, as North American output growth offset lower European and Latin American supply. Non-OPEC supply is forecast to grow by 1.1 mb/d in 2013, to 54.5 mb/d.

The key findings can be seen here.

Responding to the IEA March Oil Market Report, Paul Shrieve, senior vice president for technical assurance at GL Noble Denton said:

“The headline finding of this morning’s IEA Oil Market Report - that North American output growth is currently offsetting a decline in European and Latin American output - shouldn’t come as a surprise. Earlier this year, GL Noble Denton research highlighted North America as the number one industry investment destination in 2013, and with output continuing to rise, the region is justifying early operator confidence.

“European output capabilities are still clearly feeling the effects of strong economic headwinds, but there are growing signs that an ongoing resurgence in North Sea oil and gas activity will help to temper this. The UK and Norway have been identified as top investment destinations this year and there are suggestions that North Sea investment is reaching record levels. The realisation of this output potential will depend on the availability of skilled professionals. According to our research, a shortage of skilled labour will be the greatest barrier to industry growth in 2013, despite predictions that increasing investment in the North Sea will create thousands of new jobs over the next few years. If the skills challenge can be overcome, we may see an increase in European production.

“With oil futures prices reversing their earlier gains, it is becoming apparent that the oil market will resist any substantial long term increases, barring an unforeseen shock. GL Noble Denton research suggests that oil prices will likely continue to hold around the $100 per barrel mark until the end of the year. This high and consistent price is fuelling strong industry confidence, with our research finding that 9 out of 10 oil and gas professionals are confident for the 12 months ahead.”