For the month of February, global crude oil supplies rose to 92.81 million barrels a day, according to the International Energy Agency’s (IEA) Oil Market Report for the month. That is 600,000 barrels a day more than January, and the surge was led by a jump of 500,000 barrels a day from OPEC, primarily from an increase in Iraqi production to 3.6 million barrels a day, the country’s highest production since 1979.

Total OPEC supply reached 30.49 million barrels a day, marking the first time in five months that supply has topped 30 million barrels. The IEA noted that the demand for OPEC crude has been lowered by 100,000 barrels a day to 28.9 million barrels for the first quarter of 2014. The IEA expects demand for OPEC crude to rise to 30.2 million barrels a day in the second half of the year.

Gains in West Texas Intermediate (WTI) prices were far higher than gains in Brent prices, with WTI rising above $100 barrel for the first time in five months in February. WTI prices have slipped below $100 a barrel in the first two weeks of March, and the WTI-Brent spread is now around $9 a barrel, having widened again since mid-February.

The IEA expects global demand growth of 1.4 million barrels a day in 2014 to a daily total of 92.7 million barrels. Emerging markets are expected to provide the majority of the demand growth.

We noted on Wednesday that OPEC added 50,000 barrels a day to its demand forecast, boosting daily demand in 2014 by 1.14 million barrels to a global total of 91.1 million barrels a day. OPEC also posted a higher total for the cartel’s own February production, saying it totaled 31.41 million barrels a day with a rise of 562,000 barrels from Iraq.

The problem still plaguing supply is Libya, where production has fallen from nearly 1.6 million barrels a day in 2010 to just 350,000 barrels today. Iraq has helped overcome the shortfall, but should demand grow more than either OPEC or the IEA projects, or if there is a significant production outage, Brent prices could rise sharply as supply strains to meet expected demand.

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