IEA sees only 'modest' Opec April oil supply cuts

Opec's 10 members bound by oil supply limits showed no sign of tightening compliance in March and appear set to remain well in excess of new limits in April, the International Energy Agency (IEA) said on Friday.
In its monthly report, the West's energy watchdog said production from the 10 members with quotas was unchanged at 25.8 million bpd despite a pledge to crack down on quota-busting. Including Iraq, Opec supplies surged by 490,000 bpd to 28.2 million bpd.
Opec-10 output was 1.3 million bpd over the cartel's quota for March and 2.3 million bpd over its April 1 ceiling, which was reaffirmed on March 31.
And there is little indication of further deep this month, the IEA said.
"In reality, cuts in actual April supply are likely to be modest, confined to perhaps Saudi Arabia, UAE and possibly Iran and limited to around 500,000-600,000 bpd," the report said, noting that all three have been reported offering additional supplies above term allocations.
"Cuts from elsewhere within the organisation for April look elusive in the absence of any sustained drop in prices."
It noted that Venezuala and Indonesia are already producing 770,000 bpd below their collective target, while Algeria and Libya have little incentive to curb output given their push for a higher individual ceiling.
Nigeria, one of the biggest quota-busters, has said it cannot operationally implement the cuts before May.
Of the Opec-10 in March, higher output from Iran (100,000 bpd) and Algeria and Nigeria (30,000 bpd combined) offset a 100,000 bpd decline in Saudi output and a slight easing from UAE, Venezuala and Indonesia, it said.
Non-Opec oil supplies will also grow more slowly than expected this year, resulting in a higher "call" on crude from the producers' cartel, the IEA said.
Supply growth this year outside of Opec had been reduced by 185,000 bpd to just under 1.3 million bpd due to an upward revision in 2003 supplies and lowered expectations from the Americas and the North Sea. It is now forecast at 50.2 million bpd.
World oil supply rose 410,000 bpd to 82.3 million bpd in March thanks to rising Iraqi output. Supplies are up 2.9 million bpd versus March 2003, while the first quarter rose 3.3 million bpd (or four percent) year-on-year.