IEA cuts 2011 oil demand outlook on soft economy
8/10/2011 12:00:00 AM
The agency cut its demand forecast for the year by 60,000 bpd to 89.5 million bpd.
The IEA issued the forecast in its monthly oil market report. A summary of that report is as follows:
Market crude prices have lost $12-$15/bbl since early August amid growing concerns over government debt and the likely impact on the global economy, the agency said.
At the time of the report, Brent and WTI futures stood at $103/bbl and $80/bbl respectively. This follows July’s relative calm, when crude rose by $1-$3/bbl, accompanied by modest gains in refining margins.
The IEA’s forecast for global 2011 oil demand was trimmed by 0.1 million bpd on weaker baseline and second-quarter data, high prices and slowing economic growth.
The 2012 outlook was raised by 0.1 million bpd due to oil-fired power needs in Japan.
Demand averages 89.5 million bpd in 2011 (+1.4% or 1.2 million bpd year on year) and 91.1 million bpd in 2012 (+1.8% or 1.6 million bpd).
A lower GDP case would cut 0.3 million bpd and 1.3 billion bpd respectively from 2011 and 2012 demand, the IEA said.
World oil supply in July rose by 0.6 million bpd from June to 88.7 million bpd, with non-OPEC production up by 0.4 million bpd.
Rising Canadian production offset lower UK production. Non-OPEC supply is now seen averaging a lower 53 million bpd in 2011 on prolonged production outages, rising to 54 million bpd in 2012.
OPEC crude supply in July averaged 30.05 million bpd, up by 0.1 million bpd from June.
Output has regained levels close to those seen before the Libyan crisis, although OPEC spare capacity now stands at only 3.3 million bpd.
Output still lags a ‘call on OPEC crude and stock change’ that averages 31 million bpd in the second half of 2011 and 30.8 million bpd for 2012, the IEA said.
June OECD industry oil inventories fell counter-seasonally by 11.8 million bbl to 2,678 million bbl, or 58.4 days of forward demand.
The surplus to the five-year average narrowed significantly, from 18.2 million bbl in May to 4.7 million bbl in June.
Preliminary July data suggest an 18.5 million bbl gain in onshore OECD inventories, but floating storage fell.
Global refinery crude runs for the second quarter were raised by 0.1 million bpd since last month, as surging Russian June throughputs offset weaker-than-expected Chinese runs.
Third-quarter estimates are unchanged, up 2.2 million bpd from the second quarter at 75.9 million bpd, as stronger expected OECD runs counteract a weaker picture for non-OECD Asia.
The IEA is run by the Organisation for Economic Cooperation and Development (OECD).
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