The IEA has released its Oil Market Report for July 2015, noting that global oil demand growth is forecast to slow to 1.2 million bpd in 2016, from an average 1.4 million bpd this year, though strong consumption is expected in non-OECD Asia.
World oil demand growth appears to have peaked in the first quarter at 1.8 million bpd, according to IEA, and will continue to ease throughout the rest of 2015 and into 2016 as temporary support fades.
Global oil supply increased by 550 000 bpd in June, on higher output from both OPEC and non-OPEC producers. At 96.6 million bpd, world oil production was 3.1 million bpd higher than a year earlier, with OPEC crude and natural gas liquids accounting for 60% of the gain. Lower oil prices and spending cuts are expected to take a toll on non-OPEC supply growth in 2016.
OPEC crude supply rose by 340 000 bpd in June to 31.7 000 bpd (a three year high), led by record high output from Iraq, Saudi Arabia and the United Arab Emirates. OPEC output stood 1.5 million bpd above the previous year. The ‘call on OPEC crude and stock change’ for 2016 is forecast to rise by 1 million bpd, to 30.3 million bpd.
OECD industry inventories hit a record 2 876 million bbls in May, up by 38 million bbls. Product holdings led the build up and by end month covered 30.7 days of forward demand. Global supply and demand balances suggest that the rate of global stock increases quickened rapidly to 3.3 million bpd during the second quarter.
Robust margins resulted in stronger than expected OECD refinery runs, lifting second quarter global throughput estimates to 78.7 million bpd. Global refinery throughputs are forecast to increase by a further 0.7 million bpd in the third quarter, with annual gains shifting to the non-OECD. New capacity start ups in 2015 and 2016 will put margins under pressure.
Adapted from press release by Rosalie Starling
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