Global oil demand plummets to 1.2 million bpd in new IEA report

A new oil market report released by the International Energy Agency on Thursday forecasts that growth in global oil demand will ease to around 1.2 million barrels per day in 2016 below the 1.8 million barrels per day expansion last year due largely to fallen production in Nigeria, United Arab Emirates and Iraq.

The report cites an earlier OPEC month report published on Wednesday which indicates that OPEC crude oil production fell by 90 thousand killobarrels per day (kb/d) in March to 32.47 million barrels per day (mb/d )as “ongoing outages in Nigeria, the United Arab Emirates and Iraq more than offset a further increase from Iran and higher flows from Angola. Supply from Saudi Arabia it was noted also dipped in March but held near 10.2 mb/d.

Nigeria’s production fell by 67,000 barrels per day in March, according to OPEC Figures, which now puts Nigeria’s crude oil output to at 1.677 mb/d in March down from 1.744 million bpd in February. While Angola saw its oil output rise to 1.782 mb/d last month from 1.767 mb/d in February.

Preliminary data recorded for the first quarter of 2016, the report avers show that with year-on-year growth down to 1.2 mb/d, after gains of 1.4 mb/d in the final quarter of 2015 and 2.3 mb/d in the prior quarter indicating that significant deceleration have taken hold across China, the United States and much of Europe

“Global oil supplies sank by 0.3 mb/d in March to 96.1 mb/d, with annual gains shrinking to 0.2 mb/d, from 1.7 mb/d a month earlier and 2.7 mb/d a year earlier. The outlook for non-OPEC production in 2016 is largely unchanged since last month’s OMR, at 57 mb/d, 710 000 barrels per day (710 kb/d) less than the 2015 average.” stated the report.

it further states that first-quarter global refinery runs are estimated at 79.3 mb/d, 1.2 mb/d higher than in the first quarter of 2015, in line with global demand growth.

The forecast for the second quarter throughput is at 79.7 mb/d, up only 0.8 mb/d year-on-year, slower than the forecast 1.1 mb/d demand growth. All of the net growth in the first half of 2016 comes from non-OECD refiners.

However commercial stocks in the OECD built counter-seasonally by 7.3 mb in February to end the month at 3 060 mb.

This development the report observed led to the overhang of inventories against average levels widening to 387 mb at end-month. Preliminary information for March, it avers, suggests that OECD holdings rose further while volumes of crude held in floating storage increased.

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.