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Wednesday, November 21, 2018

Strong demand growth

  • IEA reports that global oil product demand is expected to rise by a robust 2.5% to 88.2 mbd in 2008, largely due to a weather-related rebound in the OECD and strong demand in non-OECD countries. This represents an increase of 2.2 mbd, from the slightly revised (-0.1 mbd) 2007 level of 86.0 mbd.
  • Non-OPEC supply in 2008 is forecast to reach 51.0 mbd (+1.0 mbd), plus 5.5 mbd of OPEC gas liquids (+0.7 mbd). Key growth drivers include the FSU, Latin America and global biofuels. OECD Europe and North America continue to see production decline, despite strong growth from the US Gulf of Mexico and Canadian oil sands.
  • OPEC capacity rises by 1 mbd in 2008 to average 35.4 mbd, with the implication that spare capacity will post a modest rise. In reality, the spare capacity comparison will depend to a large extent on OPEC production levels both in the second half of 2007 and next year.
  • Global refinery crude throughput increased by 0.2 mbd in May to 72.7 mbd and is 0.4 mbd higher year-on-year. Crude throughput is forecast to increase rapidly to an August peak of 75.2 mbd, on the back of higher runs in the OECD and the Middle East.
  • Preliminary end-June OECD stock data show an increase of 7.8 mb, as increases in the US and Japan offset a sharp downturn in Europe. Together with an average 21.2 mb rise in stocks in April and May, this implies a second-quarter stock build around 550 kb/d and forward demand cover at end-June unchanged at 53.6 days.

 Contact: Erik Ranheim