The IEA Oil Market Report (OMR) for May has reported that despite slowing US output of light tight oil, global oil supply growth has remained at a steep 3.2 million bpd year on year in April. At 95.7 million bpd, total oil supplies were flat from March as higher OPEC output offset a drop in non-OPEC production. Non-OPEC supply growth for the 2015 is projected at 830 000 bpd, up 200 000 bpd since last month’s report.
OPEC crude supply increased by 160 000 bpd to 31.21 million bpd in April, the highest since September 2012, and nearly 1.4 million bpd above a year earlier, as Iraq and Iran boosted output and top exporter Saudi Arabia held flows over 10 million bpd. Upward revisions to non-OPEC supply lower “the call on OPEC” by 0.3 million bpd for the second half of this year, to 30 million bpd.
Outside of OPEC
The May OMR projects global oil demand growth at 1.1 million bpd for this year, to 93.6 million bpd, up from 0.7 million bpd in 2014. The forecast is unchanged since last month as an improving economic outlook for Europe and a cold winter lift projections of OECD demand but only offset reduced expectations for the former Soviet Union, the Middle East and Latin America.
Global refinery crude runs are expected to dip to 77.8 million bpd in the current quarter, from 78.2 million bpd in the first quarter of this year. Estimates for both quarters have been lifted markedly since the April OMR on robust runs in Asia and Europe. Annual gains, of 1.4 million bpd for both the first and second quarters, largely shift to the non-OECD region on the current quarter.
OECD industry oil stocks increased counter seasonally in March by 38.4 million bbls, led by US crude. Refined products meanwhile inched lower and by end month covered 30.3 days of forward demand, level with a month earlier. Preliminary data indicate OECD stocks continued on an upward trend, building by 35.8 million bbls in April.
“Reversal of fortune: Asian crude imports go from premium to discount,” examines how pricing of crude oil imports into OECD Asia Oceania reached its widest negative differential versus OECD Europe since March 2014.
Edited from press release by Claira Lloyd