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Thursday, October 18, 2018

Oil stocks at minimum operating levels in key markets – IEA

OPEC crude oil supply increased by 1.5 mbd, of which Saudi Arabia added 0.33 mbd and Venezuela 0.85 mbd. Non-OPEC crude oil production increased by 0.34 mbd.

IEA note that spare OPEC oil production capacity fell to 1.7 mbd in February, and could drop below 1 mbd early March. This is less than the potential loss of supply in the event of war in Iraq.

World industry oil stocks are tight and trending around minimum operating levels in key markets. Surplus oil production capacity is low due to capacity losses in Venezuela and the offsetting surge in OPEC supply. A further supply disruption would tax a system operating at close to capacity. However, the end of the peak winter heating season is approaching, which entails a 1.6 mbd reduction in quarter-on-quarter demand and a corresponding fall in “call on OPEC” crude. This reduction alone has the potential to offset current Iraqi oil-for-food exports.

The world oil supply and demand details in table and graphsare available here.

Contact: Erik Ranheim or Jan Svenne