Oil demand up 1.1 mbd per year on average until 2016 - IEA

Published:

13 December 2011 09:13

Updated:

08 March 2012 10:08

IEA reports that a more precarious economic backdrop and weaker 4Q11 data – particularly for OECD Europe – curb oil demand projections for 2011 and 2012 by around 0.2 mbd. Global oil demand is expected to average 89.0 mbd by 2011, a rise of 0.7 mbd on 2010, before gaining a further 1.3 mbd in 2012 to reach 90.3 mbd.

Global oil supply rose by 0.9 mbd to 90.0 mbd in November from October, driven by lower non‐OPEC supply outages. A yearly comparison shows similar growth, with OPEC supplies standing well above year‐ago levels. Non‐OPEC supply growth averages 0.1 mbd for 2011 but rebounds to 1.0 mbd in 2012, with strong gains expected from the Americas.

OPEC crude oil supply in November rose to the highest level in more than three years, up by 0.620 mbd to 30.68 mbd, with Saudi Arabia and Libya accounting for 80% of the increase. OPEC ministers will meet on 14 December in Vienna to review the market outlook. The ‘call on OPEC crude and stock change’ for 2012 stands at 30.2 mbd, near recent OPEC output levels.

Updated medium‐term projections show global oil demand rising from 88.3 mbd in 2010 to 95.0 mbd in 2016, growth of 1.1 mbd per year on average. A stronger global liquids supply outlook now sees upstream capacity attain 101.5 mbd by 2016, average yearly growth of 1.3 mbd, with the outlook for Iraq, Libya and the Americas stronger than in June. Meanwhile, global crude distillation capacity additions for 2010‐2016 are trimmed by 0.9 mbd, but remain a substantial 8.7 mbd.

Global refinery crude throughputs fell by close to 1 mbd in October, as OECD autumn maintenance hit its seasonal peak and Chinese runs remained weak. Preliminary data show runs rebounding sharply in November, despite poor margins, to meet higher winter demand. 4Q11 estimates are largely unchanged at 75.1 mbd, rising to 75.8 mbd in 1Q12.

OECD industry oil stocks declined in October by a steep 36.3 mb to 2 630 mb, or 57.2 days of forward cover. The inventory deficit versus the five‐year average widened to 61.9 mb, from 40.0 mb in September, and crude and middle distillates dominated the October decline. November preliminary data show a counter‐seasonal, 6.9 mb build in OECD industry stocks.

Crude futures prices moved higher in November and early‐December on seasonal demand strength and tight supply. Bullish impetus also came from news of a potential EU ban on Iranian crude imports. These factors outweighed escalating economic risks, but resulted in uneven price gains among the key benchmarks. At writing, Brent stood near $107/bbl, with WTI around $98/bbl.