IEA: OIL DEMAND, LOW STOCKS CALL FOR 2.3MLN B/D RISE
PARIS (MktNews) - Global oil demand growth this year is expected to outpace non-OPEC supply grow by over half a million barrels per day on top of a supply deficit of over a million b/d last year due to heavy stock drawdowns, the International Energy Agency said Friday.
In order to return crude oil and product stocks to the average levels between 1990 and 1996, crude output would have to rise by about 2.3 million b/d, "even assuming that non-OECD stocks are unchanged," the IEA said in its Monthly Oil Report.
While oil refining margins have improved recently, "there remains little incentive for refiners to increase crude runs," it said. This has delayed the necessary rebuilding of stocks, creating risks for supply at the gasoline pump this summer,
The IEA revised down its estimate of OECD stock levels at the end of last year by 46.5 million barrels. There was an additional stock draw of 500,000 b/d in January that "appears to have continued in February," it said.
"Crude oil prices were volatile in February," it noted. "Driven by regional supply imbalances, product price gains moved ahead of crude oil price increases, improving refining margins, albeit from depressed levels."
OPEC supply rose by 540,000 b/d in February, two thirds of which came from Iraq. Excluding Iraq, OPEC compliance with output ceilings slipped to 74% from 78% in January. The increase more than offset a drop of 290,000 b/d in non-OPEC supply in February, due to declines Mexico, China and Vietnam.
The IEA revised down its overall oil demand forecasts for the first and second quarters by 400,000 b/d and 100,000 b/d, respectively, reflecting the dampening effect of higher prices. It revised up its demand forecasts for the third and fourth quarters by 100,000 b/d, giving a downward revision for the full year of 100,000 b/d to 76.9 mb/d, up 1.7 mb/d or 2.2% from last year.
The agency revised down its non-OPEC supply forecasts for the third and fourth quarters by 100,000 b/d, leaving the full-year projection unchanged at 45.6 mb/d.
As a result, the expected call on OPEC crude plus stock changes was revised down by 500,000 b/d for the first quarter and by 200,000 b/d for the second. Third and fourth quarter projections were each revised up by 200,000 b/d, giving an downward revision of 100,000 b/d for the full-year average. |
