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Tuesday, November 13, 2018

Oil demand again revised upwards – IEA

In its 10 June Monthly Oil Market Report, the International Energy Agency (IEA) has yet again raised its 2004 world oil demand forecast upwards, this time by 0.36 mbd to a growth of 2.3 mbd or 2.9% over that for 2003 - the steepest annual increase since 1980. New March data show that demand has surged in Brazil and India.  

Oil demand growth in the 2nd quarter of 2004 has been raised upwards by 0.9 mbd to 3.5 mbd in light of strong FSU and North American spring demand. For 2004, IEA estimates world oil demand at 81.1 mbd compared to 78.8 mbd last year.  

Chinese oil demand continues to drive global growth. Oil product consumption from the power generation, transportation and petrochemical sectors is expected to surge by 1.2 mbd in the 2nd quarter, following on a 1st quarter gain of 1 mbd. In addition, the expansion of pipeline and commercial oil storage capacity is absorbing substantial volumes of incremental crude and products for line-fill and minimum operational stocks. 

A run-up in crude and product prices, partly mitigated in early June by word of OPEC’s commitment to production increases, do not so far appear to have tangibly slowed demand growth. But the effect of high oil prices on demand would likely be felt if recent levels were to be sustained.

OPEC-10 boosted May crude oil supply by 0.68 mbd to 26.1 mbd. OPEC further agreed to raise production targets by 2 mbd to 25.5 mbd from July and by a further 0.5 mbd from August. Iraqi production fell 0.21 mbd to 2.1 mbd in May as export flows were disrupted. Total world oil output in May was up 0.46 mbd, all attributable to increased OPEC production. Non-OPEC crude oil production increased for Russia and Africa while other areas’ contribution declined. 

OECD industry oil stocks closed up 9m bbls in April ending 29m bblsabove the same period in 2003. While the OECD crude stock position has improved, products remain tight and forward demand cover remains depressed for a third month at 51 days. US gasoline stocks are expected to close in June at levels above those of a year ago as both imports and domestic output rise. 

Updated world oil supply and demand in tables and graphs can be found on the following link on the INTERTANKO website

Contact: Erik Ranheim