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Tuesday, November 20, 2018

International Energy Agency issues June Oil Market Report

The June Oil Market Report of the Paris-based International Energy Agency shows the following adjustments to previous assessments.


Global oil product demand is revised up to 84.5 million barrels per day (mbd) for 2006 and 86.1 mbd for 2007 (revisions of +0.250 mbd and +0.420 mbd, respectively). This is the result of baseline adjustments for non-OECD countries. World oil product demand is now estimated to rise overall by 2.0% or 1.7 mbd over 2007.

World crude oil supply in May fell by 0.565 mbd to 84.9 mbd. Seasonal OECD stoppages compounded weaker OPEC crude supply, notably in Nigeria, where outages have been near 800 kbd (thousand barrels per day). Non-OPEC 2007 output is trimmed by 110 kbd to 50.2 mbd, with growth of 0.9 mbd this year.


Nigerian outages have contributed to cut overall OPEC crude supply by 0.425 mbd to 30.1 mbd.


While effective spare oil production capacity stands at 2.8 mbd, refining constraints imply much lower marketable spare capacity. In addition, stronger demand raises 2007’s call on OPEC crude (and stocks) by 0.5 mbd, with the seasonal rise in the call forecast to outstrip OPEC capacity additions by the fourth quarter 2007 (4Q07).

 Global refinery crude throughput rose by 0.6 mbd to 72.4 mbd in April. Higher refinery throughput in the OECD and China offset lower runs in the Former Soviet Union (FSU) and India. Global crude runs could rebound to an August peak of 75.2 mbd due to higher OECD throughput.


Total OECD industry oil inventories rose by 9.9 mb in April, with a crude build offsetting a dip in product stocks. While forward cover stayed flat at 54 days, total OECD gasoline inventories are now well below their five-year average range.


Dated Brent rose to above USD 70/bbl in late May as markets tightened on stronger demand, lower supply, ongoing downstream tightness and early summer storms. Economic concerns, weaker commodities and the passing of Cyclone Gonu saw prices dip as the report went to press.


Contact: Erik Ranheim