IEA releases Oil Market Report for December

World oil demand growth of 1.2 million barrels per day (mb/d) is forecast in 2016, as first signs of a slowdown appear, according to the International Energy Agency (IEA) Oil Market Report (OMR) for December. The confirmation of the IEA outlook of the previous two OMRs comes as early indicators for the current quarter show growth easing to 1.3 mb/d from a year earlier, from a peak of 2.2 mb/d last quarter. The resulting annual growth of 1.8 mb/d for 2015 is led by China, the US, India, and Europe.

Slightly higher OPEC crude output accounted for the lion’s share of the 50 000 barrels per day (50 kb/d) increase in global oil supply in November, to inch up to a total of 96.9 mb/d, or 1.8 mb/d above a year earlier. Non-OPEC supply held at 58.5 mb/d in November, and annual growth slowed to below 300 kb/d from 2.2 mb/d at the start of 2015.

OPEC crude output edged up to 31.73 mb/d as record production from Iraq and higher supply from Kuwait offset losses from African members. The OMR’s “call on OPEC crude and stock change” for 2016 was unchanged from the November issue at 31.3 mb/d – a substantial rise of 1.6 mb/d on this year.

OECD commercial stocks drew for the first time in seven months in October to stand at 2 971 mb at the end of the month. Global inventories are set to keep building at least until late 2016, but at a much slower pace than observed this year. New and spare storage capacity should be able to accommodate the projected extra 300 mb of stocks.

Global refinery runs rose by 1.4 mb/d in November to 79.9 mb/d as the maintenance season drew to a close. Margins in November remained healthy, though lower in the US, supported by gasoline and naphtha. Product cracks and margins, however, took a hit in early December.

The December OMR features a focus on how heady growth in vehicle sales is supporting strong growth in Chinese gasoline demand. Another article examines the divergence between inland and coastal European refinery stocks because of difficulty in draining product held in tanks in the Amsterdam-Rotterdam-Antwerp region to supply demand centers in central Europe. A third article details the effect of Russia’s latest export duties reform on oil product exports.

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