Global demand growth is forecast to slow to 1.2 million barrels per day (mb/d) in 2016 after surging to a five-year high of 1.8 mb/d in 2015, the latest IEA Oil Market Report (OMR) said.
The November report said momentum will ease towards its long-term trend as recent props – sharply lower oil prices, colder-than-year-earlier winter weather and post-recessionary bounces in some countries – are likely to give way.
Global oil supplies breached 97 mb/d in October, the report said, as non-OPEC output recovered from lower levels the previous month. Despite the resilience of producers such as Russia, non-OPEC supply is forecast to contract by more than 0.6 mb/d next year. US light tight oil (LTO), the driver of non-OPEC growth, is expected to decline by 0.6 mb/d in 2016.
OPEC crude supply held steady in October at 31.76 mb/d, with declines in Iraq and Kuwait offset by higher supply from Libya, Saudi Arabia and Nigeria. A slight tightening in fundamentals lifts the 2016 “call” on OPEC by 0.2 mb/d from last month’s OMR to 31.3 mb/d, an IEA statement said.
OECD commercial inventories rose counter-seasonally by 13.8 mb to stand at a record near-3 billion barrels by end-September. The pace of global stockbuilding slowed during the third quarter to 1.6 mb/d from 2.3 mb/d in the second quarter but remained significantly above the historical average, it added.
The report said global refinery runs sank by 1.2 mb/d in October to 78.2 mb/d with seasonal maintenance in full swing, leading to a significant reduction in annual throughput growth. Margins edged lower in October versus September but remained robust despite high product stocks.