Global demand for crude oil slowed at a "remarkable” pace in the second quarter because of weak economic growth in Europe and China, according to the International Energy Agency, the Paris-based energy watchdog for 28 industrialised countries, including Ireland.
The IEA Oil Market Report (OMR) for September trimmed global oil demand growth for 2014 and 2015 to 0.9 million barrels per day (mb/d) and 1.2 mb/d, respectively, because of a pronounced slowdown in demand growth in the second quarter of this year and a weaker outlook for Europe and China. Demand in 2015 is now set at 93.8 mb/d, the monthly report informed subscribers.
Global supply declined 400,000 barrels per day (400 kb/d) in August, to 92.9 mb/d, as non-OPEC production eased. Also, non-OPEC production fell by 130 kb/d in August to 30.31 mb/d as a steady recovery in Libya failed to offset lower supply from Saudi Arabia and Iraq. But compared with August 2013, global supply rose 810 kb/d as a 1.2 mb/d rise in non-OPEC output more than offset a 370 kb/d year-on-year drop for OPEC. Non-OPEC supply is set to expand by 1.6 mb/d in 2014, and 1.3 mb/d in 2015, to reach 57.6 mb/d.
The weaker demand outlook as well as robust non-OPEC supply growth led the OMR to trim its call on OPEC crude and stock change” by 200 kb/d for the fourth quarter of this year to 30.6 mb/d and 300 kb/d for 2015 to 29.6 mb/d.
OECD industry inventories built seasonally by 15.5 mb in July, to 2 670 mb, on soaring US stocks of “other products.”Preliminary data indicate that stocks continued their upward trajectory in August, rising by 19.5 mb, further cutting the deficit to the five‐year average, which stood at 57 mb/d at end‐July.
Highlights of the latest OMR
- Oil prices fell sharply in August, weighed down by abundant supplies and further indications of slow global economic and oil–demand growth. ICE Brent futures tumbled below $100/bbl on 8 September for the first time in over a year and were last trading at $98/bbl. NYMEX WTI was around $91.40/bbl.
- Global oil demand growth for 2014 and 2015 has been curbed to 0.9 mb/d and 1.2 mb/d, respectively, to reach 93.8 mb/d in 2015. A pronounced slowdown in demand growth in 2Q14 and a weaker outlook for Europe and China underpin the downward revisions.
- Global supply was down 400 kb/d in August, to 92.9 mb/d, on lower non-OPEC production. Compared with a year ago, global supply was 810 kb/d higher, with an increase in non-OPEC of 1.2 mb/d more than offsetting a 370 kb/d OPEC decline. Non-OPEC supply is set to expand by 1.6 mb/d in 2014, and 1.3 mb/d in 2015, to reach 57.6 mb/d.
- OPEC production fell by 130 kb/d in August to 30.31 mb/d as a steady recovery in Libya failed to offset lower supply from Saudi Arabia and Iraq. The call on OPEC crude and stock change’ was lowered by 200 kb/d for 4Q14 to 30.6 mb/d and 300 kb/d for 2015 to 29.6 mb/d on a weaker demand outlook and robust non-OPEC supply growth.
- OECD industry inventories built seasonally by 15.5 mb in July, to 2 670 mb, on soaring US ‘other products’ stocks. Preliminary data indicate that stocks continued on their upward trajectory during August, rising by 19.5 mb, further cutting the deficit to the five-year average which stood at 57 mb/d at end-July.
- Global refinery crude throughputs surged by more than 2 mb/d over July and August to a seasonal peak of 78.7 mb/d before autumn maintenance curbed activity again from September. Global crude runs projections for 2H14 are largely unchanged since last month’s Report, averaging 77.9 mb/d in 3Q14 and 77.5 mb/d in 4Q14.
