The International Energy Agency (IEA) said Wednesday in its Oil Market Report for August that global oil demand in 2015 is expected to grow by 1.6 mb/d, up 0.2 mb/d from IEA’s previous Report and the fastest pace in five years, as economic growth solidifies and consumers respond to lower oil prices.
According to IEA, persistent macro-economic strength supports above-trend growth of 1.4 mb/d in 2016.
The agency said that world oil supply fell nearly 0.6 mb/d in July, mainly on lower non- OPEC output. OPEC crude production held steady near a three-year high. As lower prices and spending cuts take a toll, non-OPEC supply growth is expected to slow sharply from a 2014 record of 2.4 mb/d to 1.1 mb/d this year and then contract by 200 kb/d in 2016.
OPEC crude supply inched 15 kb/d lower in July to 31.79 mb/d as Saudi output eased and offset record high Iraqi production and increased Iranian flows. The ‘call on OPEC crude and stock change’ rises to 30.8 mb/d in 2016, up 1.4 mb/d on this year due to a stronger demand outlook and stalling non-OPEC supply growth.
OECD inventories rose counter-seasonally by 9.9 mb to hit another all-time high of 2 916 mb in June with their surplus to average levels widening to a record 210 mb. As the seasonal restocking of ‘other products’ continued apace, refined products by end-month covered 31.3 mb days of forward demand, 0.2 days above end-May.
Global refinery runs reached a record 80.6 mb/d in July, 3.2 mb/d up on a year earlier, but fissures are showing. High distillate stocks have pushed cracks in Singapore down to their lowest level since 2009 and prompted run cuts in Asia. Elsewhere, especially in the US, still-soaring gasoline cracks supported high margins and throughput.
The Oil Market Report is EIA’s monthly publication which provides a view of the state of the international oil market and projections for oil supply and demand 12-18 months ahead.