The International Energy Agency (IEA) has released its Oil Market Report for March 2016.
Crude prices rose to their highest in three months in early March, stoked by tightening supply, proposed new producer talks on co-ordinated output action and US dollar weakness. At the time of writing, Brent was at US$39.80/bbl and US WTI was at US$37.30/bbl.
Sharp decelerations in demand growth – particularly in the US and China – pulled global growth down to a one year low of 1.2 million bpd in 4Q15, compared to the year earlier, dramatically below the near five year high of 2.3 million bpd in 3Q15. A gain of around 1.2 million bpd is forecast for 2016.
Global oil supplies eased by 180 000 bpd in February, to 96.5 million bpd, on lower OPEC and non-OPEC output. Production stood 1.8 million bpd above a year earlier, as a slight decline in non-OPEC was more than offset by OPEC gains. Non-OPEC production is estimated to fall by 750 000 bpd, to 57.0 million bpd in 2016, 100 000 bpd less than in last month's report.
OPEC crude oil production eased by 90 000 bpd in February to a still robust 32.61 million bpd with losses from Iraq, Nigeria and the UAE partly offset by a substantial rise in flows from post-sanctions Iran. Saudi Arabia, OPEC's largest producer, held supplies steady.
OECD commercial inventories gained 20.2 million bpd in January while forward demand cover remained comfortable at 32.7 days. Preliminary data suggest that in February, OECD inventories drew for the first time in a year while volumes of crude held in floating storage increased.
Global refinery throughputs are estimated at 79.1 million bpd in 1Q16, reflecting weak OECD refinery throughput and a shift of peak spring maintenance to 1Q. Annual growth in 4Q15 fell to below 1 million bpd in 4Q15 amid product stock builds and in line with a slowdown in global oil demand growth.
Adapted from press release by Rosalie Starling
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