IEA releases Oil Market Report for October
Published by Rosalie Starling,
Editor - Hydrocarbon Engineering
Hydrocarbon Engineering,
Global oil supply rose by 0.6 million bpd in September, according to the newly released IEA Oil Market Report (OMR) for October. Non-OPEC supply was up nearly 0.5 million bpd on higher Russian and Kazakh flows and OPEC supply was at an all-time high. World oil output of 97.2 million bpd was up 0.2 million bpd from last year due to strong OPEC growth. Non-OPEC supply is forecast to drop by 0.9 million bpd in 2016 before rebounding by 0.4 million bpd in 2017.
Meanwhile OPEC crude output rose by 160 00 bpd to a record 33.64 million bpd in September as Iraq pumped at the highest ever and Libya reopened ports. Supply from the group stood 0.9 million bpd above 2015 due to robust Middle East output. OPEC has agreed to cut supply to between 32.5 million bpd and 33 million bpd, with details to be set by the end of November.
Demand is forecast to expand by 1.2 million bpd this year, with a similar gain expected in 2017. Growth continues to slow, dropping from a five year high in 3Q15 to a four year low in 3Q16 due to vanishing OECD growth and a marked deceleration in China. The potential for colder weather should see growth rebound somewhat in 4Q16.
OECD commercial inventories fell for the first time since March, by 10 million bbls to 3092 million bbls in August due to a larger than seasonal decline in crude stockpiles. Preliminary data for September show crude stocks falling in both Japan and the US.
Weighed down by autumn maintenance, global refinery throughput in 4Q16 is expected to decline seasonally by 1.1 million bpd, up just 70 000 bpd y/y. Global throughput in 2016 is expected to grow y/y by just 220 000 bpd, the lowest annual growth rate in more than a decade, excluding the last economic recession.
Benchmark crude prices rose in September as market rebalancing continued and participants anticipated an OPEC supply cut. At the time of writing, front month ICE Brent was trading at US$53.05/bbl with front month NYMEX WTI lower at US$51.15/bbl.
Read the article online at: https://www.hydrocarbonengineering.com/refining/14102016/iea-releases-oil-market-report-for-october/
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