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Highlights

  • Oil fell for a third month straight in September with Brent breaking through $90/bbl in October, on abundant supply, slowing demand growth and a strong US dollar. Brent prices have fallen by over 20% since June, when turmoil in Iraq lifted prices to $116/bbl, and were last at a near four-year low of $88.70/bbl. NYMEX WTI was at $85.20/bbl.
  • The forecast of global oil demand for 2014 has been revised 0.2 mb/d lower since last month's Report, to 92.4 mb/d, on reduced expectations of economic growth and the weak recent trend. Annual demand growth is now projected at 0.7 mb/d in 2014, rising tentatively to 1.1 mb/d in 2015, as the macroeconomic backdrop improves.
  • Global supply rose by almost 910 kb/d in September to 93.8 mb/d, on higher OPEC and non-OPEC output. Compared with a year earlier, total supply stood 2.8 mb/d higher, as OPEC supply swung back to growth and amplified robust non-OPEC supply gains of 2.1 mb/d. Non-OPEC supply growth is expected to average 1.3 mb/d 2015.
  • OPEC crude oil output surged to a 13-month high in September, led by Libya's continued recovery and higher Iraqi flows. Production rose 415 kb/d from August to 30.66 mb/d. A weaker demand outlook cut the 'call on OPEC crude and stock change' by 200 kb/d for 2015 to 29.3 mb/d. The 'call' declines seasonally by 1.5 mb/d from 4Q14 to 1Q15.
  • Global refinery crude demand hit new highs in August, near 79 mb/d, with OECD runs leading the uptick. The onset of seasonal plant maintenance sees runs fall through October, taking global crude runs to 77.5 mb/d in 4Q14 from 78.1 mb/d in 3Q14, with year-on-year growth rising over the same period to 1.4 mb/d from 0.9 mb/d.
  • OECD commercial total oil inventories built by 37.7 mb over August, to 2 698 mb, narrowing the five-year-average deficit to 38.1 mb, from 67.1 mb one month earlier. Preliminary data indicate that inventories rose counter-seasonally by 14.0 mb over September, led by a steep 11.7 mb build in middle distillates.

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