Oil market caught in cross currents, with supply surplus set to swing to deficit this year, IEA reports.

 The global oil market is caught in the cross currents of supply outstripping demand at the moment – but with the prospect of the market swinging into deficit during the second half of the year when China is expected to drive world oil demand to record levels, according to our latest monthly Oil Market Report.

 The current lacklustre demand has resulted in global oil stocks building to their highest levels in 18 months. Much of the supply overhang reflects a trend of ample Russian supplies racing to re-route to new destinations in response to the full force of EU embargoes.

 Our report notes that building up oil stocks today will help ease tensions later in the year, since global demand is set to surge by 3.2 million barrels a day between the first and fourth quarters, taking average annual growth to 2 million barrels a day.