Tight market fundamentals and risks surrounding Iran underpin 20% rise in crude prices since December, says Oil Market Report

14 March 2012

OECD industrial oil inventories are below their five year average, and OPEC spare capacity below 3 million barrels per day (mb/d). Non-OPEC supply in Syria, Yemen and Sudan/South Sudan has been shut-in, although higher 2012 output is likely from the Americas and Former Soviet Union. In contrast, OPEC February output reached a post-2008 high, with Saudi Arabia producing 10 mb/d. Anticipated 2012 demand growth is unchanged at +0.8 mb/d, and concerns over the global economy provide a ceiling for prices. Refining activity remains buoyant in the US, China and Russia, although margins generally are weak.

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