Growth in global oil demand will ease to around 1.2 million barrels per day (mb/d) in 2016, below the 1.8 mb/d expansion of last year, as an economic slowdown takes roots in China, the United States and much of Europe, the International Energy Agency (IEA) said in tis latest monthly report.
It said preliminary data for the first quarter of 2016 reveals that this is already occurring, 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.
According to the report, 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 at 57 mb/d, 710 000 barrels per day (710 kb/d) less than the 2015 average.
OPEC crude oil production fell by 90 kb/d in March to 32.47 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 dipped in March but held near 10.2 mb/d, the report said.
It said 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.
Commercial stocks in the OECD built counter-seasonally by 7.3 mb in February to end the month at 3 060 mb. Accordingly, the overhang of inventories against average levels widened to 387 mb at end-month. Preliminary information for March suggests OECD holdings rose further while volumes of crude held in floating storage increased.