Global demand growth is expected to slow from its five-year high of 1.8 mb/d in 2015 to 1.2 million barrels per day (mb/d) in 2016 – closer toward its long-term trend as previous price support is likely to wane, the International Energy Agency (IEA) noted in its October Oil Market Report. Recent downgrades to the macroeconomic outlook are also filtering through.
World oil supply held steady near 96.6 mb/d in September, as lower non-OPEC production was offset by a slight increase in OPEC crude.
Non-OPEC accounted for just under 40% of the 1.8 mb/d annual increase in total oil output. Lower oil prices and steep spending curbs are expected to cut non-OPEC output by nearly 0.5 mb/d in 2016.
OPEC crude supply rose by 90 0000 barrels per day (90 kb/d) in September to 31.72 mb/d as record Iraqi output more than offset a dip in Saudi supply. A slowdown in forecast demand growth and slightly higher non-OPEC supply lowers the 2016 “call” on OPEC by 0.2 mb/d from September’s Oil Market Report to 31.1 mb/d.
OECD commercial inventories extended recent gains and rose by 28.8 mb in August to stand at 2 943 mb by end-month. Since this was nearly double the 15.0 mb five-year average build for the month, inventories’ surplus to average levels widened to 204 mb.
The onset of seasonal turnarounds in the OECD and the Former Soviet Union is estimated to have curbed global refinery runs by 1.9 mb/d in September to 79.4 mb/d. Runs remained remarkably strong, particularly in Asia and the Middle East, leaving global throughputs up nearly 2 mb/d from a year ago.