According to the International Energy Agency’s most recent Oil Market Report, global oil demand averaged 93.3 million b/d in this year’s first half, up 1.6 million b/d on the year and 400,000 b/d above the estimate in last month’s report. Global demand for the whole year is forecast to average 94 million b/d, 1.4 million b/d up on the year and 300,000 b/d higher than in last month’s OMR.
“Since bottoming out at a 5-year low in second-quarter 2014, global oil demand growth has steadily increased, as additional economic growth, colder-than-year-earlier European winter weather conditions and more recently price effects have filtered through,” IEA said. However, momentum is expected to ease somewhat in this year’s second half, assuming a return to normal weather conditions and given a recent partial recovery in oil prices.
Global oil production fell 155,000 b/d in May to 96 million b/d as a small increase in production from the Organization of Petroleum Exporting Countries was more than offset by lower production from non-OPEC nations.
OPEC crude supply edged up 50,000 b/d in May to 31.33 million b/d. Saudi Arabia, Iraq, and the UAE pumped at record monthly rates to keep OPEC output more than 1 million b/d above the group’s official 30 million b/d supply target for a third month running. OPEC oil ministers agreed to maintain the production target at their June 5 meeting (OGJ Online, June 5, 2015).
Non-OPEC supply is estimated to have decreased 200,000 b/d in May to 58 million b/d as wildfires and scheduled maintenance lowered Canadian output and maintenance in the North Sea got under way.
The estimate of US oil production was raised 90,000 b/d for fourth-quarter 2014 and more than 200,000 b/d for this year’s first quarter, based on latest data from the US Energy Information Administration. Sharp cuts in drilling rates are nevertheless starting to curb supplies. In all, US oil production is expected to average 12.7 million b/d in 2015, up 800,000 b/d from year ago, IEA says.
Global refinery crude runs reached an estimated 77.9 million b/d in April, 300,000 b/d lower than March and 1.7 million b/d higher than a year earlier.
Industry oil stocks from members of the Organization for Economic Cooperation and Development built up by a steep 38 million bbl in April, ending at 147 million bbl above average levels, as refined-product stocks moved to their widest surplus in over 4 years.