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Tuesday, March 20, 2018


IEA reduces world oil demand estimate for third month in a row

In its 12 February 2001 monthly oil market report, IEA has cut its estimate for 2001 by 0.3 million barrels per day to 77 mbd from the January figure. World oil demand was 75.5 mbd last year. High crude prices and mild weather in Europe and Asia explain only part of the story; the slowing world economy is also contributing to the reduced oil demand.  IEA estimates that OECD Oil-industry stocks fell 61 million barrels to 2.517 billion barrels. IEA emphasizes that, over the short-term, the low oil stocks limit the ability to respond to events such as severe weather conditions, pipeline disruptions, unscheduled refinery maintenance, spikes in demand or fuel switching. This may contribute to regional supply imbalances and price volatility.

World oil supply in January averaged 77.85 mbd, an increase of 480,000 barrels daily from December 2000. Higher non-OPEC production, rising to 46.56 mbd in January, accounted for 80,000 barrels of the increase. A rebound of Iraqi oil production accounted for the OPEC increase. Non-OPEC supply is forecast to average 46.7 mbd this year, 0.1 mbd less than that forecast last month. IEA has reduced its estimate of the market's need for OPEC oil this year by 0.2 mbd to 27.3 million, citing the lower global demand forecast. This quarter, the call for OPEC oil will be 27.8 mbd, up 0.3 mbd, and 25.7 mbd for the second quarter, down 0.2 mbd.

Oil looses market share to gas to fuel power plants in Europe.

According to IEA’s World Energy Outlook, the use of oil in power plants will decline from 43 million tonnes (0.86 mbd) in 1997, to 35 (0.7 mbd) million tonnes in 2010 and 22 million tonnes in 2020. It is gas that is projected to expand to become the main fuel for power plants in Europe.