IEA releases Oil Market Report for August

12 August 2015

Global oil demand in 2015 is expected to grow by 1.6 million barrels per day (mb/d), up 0.2 mb/d from the previous IEA Oil Market Report and the fastest pace in five years, the IEA Oil Market Report for August informed subscribers, as economic growth solidifies and consumers respond to lower oil prices. Persistent macro-economic strength supports above-trend growth of 1.4 mb/d in 2016. 

World oil supply fell nearly 0.6 mb/d in July, mainly on lower non-OPEC output. OPEC crude production held steady near a three-year high. As lower prices and spending cuts take a toll, non-OPEC supply growth is expected to slow sharply from a 2014 record of 2.4 mb/d to 1.1 mb/d this year and then contract by 200 000 barrels per day (200 kb/d) in 2016.  

OPEC crude supply inched 15 kb/d lower in July to 31.79 mb/d as Saudi output eased and offset record high Iraqi production and increased Iranian flows. The "call on OPEC crude and stock change" rises to 30.8 mb/d in 2016, up 1.4 mb/d on this year, due to a stronger demand outlook and stalling non-OPEC supply growth. 

OECD inventories rose counter-seasonally by 9.9 mb to hit another all-time high of 2 916 mb in June, with their surplus to average levels widening to a record 210 mb. As the seasonal restocking of "other products" continued apace, refined products by end-month covered 31.3 mb days of forward demand, 0.2 days above end-May. 

Global refinery runs reached a record 80.6 mb/d in July, 3.2 mb/d up on a year earlier, but fissures are showing. High distillate stocks have pushed cracks in Singapore down to their lowest level since 2009 and prompted run cuts in Asia. Elsewhere, especially in the US, still-soaring gasoline cracks supported high margins and throughput.

The August Oil Market Report also features a detailed look at cuts in capital expenditure by oil majors as well as in-depth analysis of North American producers' priorities. It also analyses the likely effect of the Iran nuclear deal on output and whether the supply-demand balance in gasoline markets is actually as tight as the recent price spread spike might suggest. The full report is available for public view here.  

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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