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Monday, December 18, 2017

Further downward revision of oil demand

According to the International Energy Agency (IEA), despite underlying economic strength, global oil demand growth for 2006 has been revised down from 1.47 mbd to 1.25 mbd in view of mild first quarter temperatures and sustained high oil prices . U.S. demand is less robust than was implied by preliminary weekly data and Former Soviet Union (FSU) apparent demand is adjusted downwards due to unexpectedly strong exports. 

World oil supply in April rose by 0.485 mbd to 85.1 mbd. Increases from OPEC, the FSU, Africa and North America were partly offset by seasonal North Sea outages. Non-OPEC supply growth for 2006 holds at 1.2 mbd. OPEC non-crude supply in 2006 grows 260 kb/d, despite reduced estimates for Venezuelan Orimulsion supply. 

April OPEC crude supply rose by 0.170 mbd to 30.0 mbd. This followed higher output in Iraq, despite ongoing pipeline problems, and to a lesser extent Nigeria, Venezuela and Libya. The 'call on OPEC crude and stock change' is revised down by 0.2 mbd to 29.2 mbd for 2006 on weaker U.S. and FSU demand, but builds to 29.7 mbd by the fourth quarter. 

OECD (Organisation for Economic Co-operation and Development) total industry oil stocks fell by 17 mb in March to 2620 mb, 74 mb above a year ago. Draws in product inventories outpaced a build in crude. For the first quarter, stocks built by 0.3 mb/d, the first such rise in nine years. Days of forward demand cover at end-March held flat at 54 days. 

Strong gasoline prices in April lifted refining margins to their highest level since the hurricane-related peaks in the autumn of 2005. OECD refinery runs fell to 38.3 mbd in March due to heavy AtlanticBasin maintenance and offline U.S. GulfCoast capacity. 

Contact: Erik Ranheim