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Thursday, November 15, 2018

IEA adjusts world oil demand in 2008 down by 0.3 mbd

The International Energy Agency (IEA) reports that global demand for oil for the fourth quarter 1007 (4Q07) is revised down by 0.5 mbd, affected by high prices, weaker-than-expected demand data from the U.S. and the Former Soviet Union (FSU), and delays to European heating oil restocking. Coupled with lower Gross Domestic Product (GDP) growth, these revisions extend to the 2008 forecast, which has been adjusted down by 0.3 mbd. World oil demand now averages 85.7 mbd in 2007 (+1.2% over 2006) and 87.7 mbd in 2008 (+2.3%).


World oil supply saw a monthly gain of 1.4 mbd in October, as non-OPEC outages receded and OPEC volumes increased. Recovery in China and Azerbaijan plus rising Russian output boosted non-OPEC supplies. Continued outages in the OECD see non-OPEC supply levelling off in November before resuming growth in December.


October OPEC crude supply increased by 0.41 mbd to 31.2 mbd. Half the rise came from Angola and Iraq, where supplies could increase further in November. Signs of higher November supply from Saudi Arabia, Nigeria and others may be offset by field maintenance in the U.A.E. OPEC October spare capacity slipped to 2.46 mbd.


OECD industry stocks fell by 29.5 mb in September, with Japanese crude stocks falling to their lowest level in more than 20 years. Total OECD forward inventory cover fell to 52.8 days, remaining close to the five-year average. Preliminary data for October suggest a further 21 mb draw in crude and product stocks in the U.S., Japan and EU-16.


The World Trade Index (WTI) hit a new record above USD 98/bbl in early November, driven by lower crude stocks, constrained supplies and new geopolitical tensions. There are, however, strong indications that high prices are depressing demand, which, together with signs of higher output from Saudi Arabia, Iraq and Nigeria, have capped further price gains.


Global refinery crude runs are seen at 73.5 mbd in 4Q07, revised down by 0.7 mbd, on the back of weaker demand, increased offline capacity and higher planned maintenance in some regions. Refinery outages and product specification changes have severely tightened European distillate markets.


Contact: Erik Ranheim