Growth in global oil demand will ease to around 1.2 million bpd in 2016, below the 1.8 million bpd expansion of last year, according to the newly released IEA Oil Market Report (OMR) for April, as notable decelerations take hold across China, the United States and much of Europe. Preliminary data for the first quarter of 2016 reveal that this is already occurring, with year-on-year growth down to 1.2 million bpd, after gains of 1.4 million bpd in the final quarter of 2015 and 2.3 million bpd in the prior quarter.
Global oil supplies sank by 300 000 bpd in March to 96.1 million bpd, with annual gains shrinking to 200 000 bpd, from 1.7 million bpd a month earlier and 2.7 million bpd a year earlier. The outlook for non-OPEC production in 2016 is largely unchanged since last month’s OMR, at 57 million bpd, 710 000 bpd less than the 2015 average.
OPEC crude oil production fell by 90 000 bpd in March to 32.47 million bpd as ongoing outages in Nigeria, the United Arab Emirates and Iraq more than offset a further increase from Iran and higher flows from Angola. Supply from Saudi Arabia dipped in March but held near 10.2 million bpd.
First quarter global refinery runs are estimated at 79.3 million bpd, 1.2 million bpd higher than in the first quarter of 2015, in line with global demand growth. The forecast for the second quarter throughput is at 79.7 million bpd, up only 800 000 bpd y/y, slower than the forecast 1.1 million bpd demand growth. All of the net growth in the first half of 2016 comes from non-OECD refiners.
Commercial stocks in the OECD built counter-seasonally by 7.3 million bbls in February to end the month at 3060 million bbls. Accordingly, the overhang of inventories against average levels widened to 387 million bbls at end-month. Preliminary information for March suggests OECD holdings rose further while volumes of crude held in floating storage increased.
Adapted from press release by Rosalie Starling
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