IEA cuts forecast of global oil demand for 2014
Oil & Gas Journal reported that the International Energy Agency's Oil Market Report for October continues to reduce its forecast of global oil demand for 2014 by 200,000 barrel per day from the previous month, to 92.4 million barrel per day, in line with lower expectations of economic growth and the weak recent trend. Annual demand growth for 2014 is now projected at 700,000 barrel per day, rising tentatively to 1.1 million barrel per day in 2015, as the macroeconomic backdrop improves.
In its October World Economic Outlook, the International Monetary Fund cut its forecast of economic growth for 2014 and 2015 for the 3rd time this year to 3.3% and 3.8% respectively, led by revisions for Europe, China, Brazil and Russia.
Global supply rose 910,000 barrel per day in September to 93.8 million barrel per day, 2.8 million barrel per day higher compared with last year, as supply from the Organization of Petroleum Exporting Countries swung back to growth and amplified robust non-OPEC supply gains of 2.1 million barrel per day.
OPEC crude oil output surged to a 13 month high of 30.66 million barrel per day in September, led by Libya's continued recovery and higher Iraqi flows, the report stated. Downward revisions to global demand outlook cut the 'call on OPEC crude and stock change' by 200,000 barrel per day for 2015 to 29.3 million barrel per day. The 'call' declines seasonally by 1.5 million barrel per day from this year's fourth quarter to Q1 2015.
The report said that September non-OPEC supply increased by 495,000 barrel per day MoM to 56.7 million barrel per day, as many producers ramped up following seasonal maintenance. The US and UK were the largest contributors to the rebound.
Pressured by abundant supply, faltering demand, and a strong US dollar, oil prices fell for a third straight month in September and sank below USD 90 per barrel in October. ICE Brent was last at a near 4 year low of USD 88.7 per barrel, down more than 20% since June. NYMEX WTI was at USD 85.2 per barrel.
Global refinery crude demand hit new highs in August, near 79 million barrel per day, with OECD runs leading the uptick. With the onset of seasonal plant maintenance through October, global crude runs are set to dip to 77.5 million barrel per day this quarter from 78.1 million barrel per day in the Q3, with YoY growth rising over the same period to 1.4 million barrel per day from 900,000 barrel per day. As crude price declines outpaced those of products, refinery margins extended upward trend in September and into October.
OECD commercial total oil inventories surged by 37.7 million barrel over August to 2,698 million barrel, narrowing the 5 year average deficit to 38.1 million barrel at end-August from 67.1 million barrel 1 month earlier.
Source – Oil & Gas Journal