IEA releases Oil Market Report for October
(Paris) — 11 October 2016
Global oil supply rose by 0.6 million barrels per day (mb/d) in September, the newly released IEA Oil Market Report (OMR) for October informs subscribers. Non-OPEC supply was up nearly 0.5 mb/d on higher Russian and Kazakh flows and OPEC supply was at an all-time high. World oil output of 97.2 mb/d was up 0.2 mb/d from last year due to strong OPEC growth. Non-OPEC supply is forecast to drop by 0.9 mb/d in 2016 before rebounding by 0.4 mb/d in 2017.
Meanwhile OPEC crude output rose by 160 kb/d to a record 33.64 mb/d in September as Iraq pumped at the highest ever and Libya reopened ports. Supply from the group stood 0.9 mb/d above 2015 due to robust Middle East output. OPEC has agreed to cut supply to between 32.5 mb/d and 33 mb/d, with details to be set by end-November.
Demand is forecast to expand by 1.2 mb/d this year, with a similar gain expected in 2017. Growth continues to slow, dropping from a five-year high in 3Q15 to a four-year low in 3Q16 due to vanishing OECD growth and a marked deceleration in China. The potential for colder weather should see growth rebound somewhat in 4Q16.
OECD commercial inventories fell for the first time since March, by 10 mb to 3 092 mb in August due to a larger than seasonal decline in crude stockpiles. Preliminary data for September show crude stocks falling in both Japan and the US.
Weighed down by autumn maintenance, global refinery throughput in 4Q16 is expected to decline seasonally by 1.1 mb/d, up just 70 kb/d year-on-year. Global throughput in 2016 is expected to grow y-o-y by just 220 kb/d, the lowest annual growth rate in more than a decade, excluding the last economic recession.
Benchmark crude prices rose in September as market rebalancing continued and participants anticipated an OPEC supply cut. At the time of writing, front month ICE Brent was trading at $53.05/bbl with front month NYMEX WTI lower at $51.15/bbl.
The Oil Market Report (OMR) is a monthly International Energy Agency publication which provides a view of the state of the international oil market and projections for oil supply and demand 12-18 months ahead. To subscribe, click here.
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