In May, global oil supplies dropped by 155 000 bpd to 96 million bpd on lower non-OPEC output, but remained at a steep 3 million bpd above the level of May last year, according to the latest IEA Oil Market Report. Annual growth slowed slightly from March and April and remained roughly split between non-OPEC and OPEC countries. The June issue of the report raised the forecast of non-OPEC supply growth for 2015 by 195 000 bpd to 1 million bpd.
The report notes that OPEC supply edged up 50 000 bpd in May to 31.33 million bpd, the highest rate since August 2012. Saudi Arabia, Iraq and the UAE pumped at record monthly rates to keep output more than 1 million bpd above OPEC’s official supply target for a third month running. Oil ministers agreed to maintain that target at the June 5 meeting.
The estimate of global demand growth has been revised up to 1.7 million bpd for the first quarter of this year, and 1.4 million bpd for all of 2015. Momentum is expected to ease somewhat the current quarter, assuming a return to normal weather conditions and given the recent partial recovery in oil prices.
Global refinery crude runs reached approximately 77.9 million bpd in April, 0.3 million bpd lower than in March, and 1.7 million bpd above a year earlier. Delayed new capacity of 1.5 million bpd in non-OECD regions has lifted product cracks and OECD refining utilisation rates, and caused backwardation to reappear in oil products markets.
OECD industry oil stocks built by 38 million bbls in April, to hit 147 million bbls above average levels, as refined product stocks moved to their widest surplus in more than four years. Preliminary data indicates that OECD inventories added a further 12.6 million bpd in May, though US crude stocks posted their first draw in nine months.
Edited from press release by Claira Lloyd