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IEA oil market report for December 2009
Published on December 12, 2009 by oilprices · No CommentsIn the latest December 2009 IEA oil market report, the IEA has raised its projection for average global oil consumption during 2009-14 by 1.9 million b/d in an update to the medium term market forecast it published last June, the update appeared in IEA’s December Oil Market Report.
The increase in projected demand from the June forecast reflects stronger economic growth in 2009-10 than was assumed in June plus the effects of economic and fiscal stimulus programs, especially among members of the Organization for Economic Cooperation and Development.
In IEA’s high-growth scenario, with global gross domestic product increasing at an average rate of 3.2%/year, worldwide oil demand rises to 90.9 million b/d in 2014 from 86.2 million b/d in 2008. In a lower-growth case, in which GDP rises 2.2%/year, global oil demand reaches 87 million b/d in 2014.
Forecast global oil demand is virtually unchanged for 2009 at 84.9 mb/d but is revised up by 130 kb/d to 86.3 mb/d in 2010. Yearly growth (‐1.4 mb/d and +1.5 mb/d, respectively) remains driven by non‐
OECD countries, but OECD prospects have slightly improved.
• OECD industry stocks fell by 36 mb in October to 2,735 mb, 2.5% above 2008’s level. Middle distillates accounted for over 40% of the draw, yet global products in floating storage continued to rise in October and November. End‐October forward demand cover fell to 59.4 days, 2.5 days higher than a year ago.
• Global oil supply rose by 200 kb/d in November. OPEC crude production increased by 135 kb/d to 29.1 mb/d, its highest level in a year. Largely as a result of lower non‐OPEC supply prospects for 2010, next year’s call on OPEC is raised by 0.5 mb/d to 29.0 mb/d, compared with 28.7 mb/d in 2009.
• Forecast 2009 non‐OPEC supply is raised by 125 kb/d to 51.3 mb/d as Russian gas liquids output is revised up. In addition, the end of the quietest US hurricane season since 1997 has contributed to lift this year’s outlook. By contrast, 2010 supply is revised down by 265 kb/d to 51.6 mb/d, with North American supply now lower.
• Projected global 4Q09 refinery crude throughput is revised down by 0.6 mb/d to 72.3 mb/d, due to weaker US preliminary data and higher maintenance in Asia and the Middle East. Global 1Q10 crude throughput is seen rising by 1.0 mb/d year‐on‐year to 72.7 mb/d, but OECD crude runs are expected to fall given weak refining margins.
• Crude oil futures prices traded in a higher $75‐80/bbl range in November before weakening in early December on fears that the recovery in the global economy could be shallower and slower than expected, especially in the key US market. Prices were trading at eightweek lows of around a $70‐74/bbl range at the time of writing.
• A medium‐term market update sees upward revisions for demand (largely non‐OECD Asia) outstripping those for supply (Russia, OPEC NGLs and Nigerian and Iraqi capacity). Yet higher OPEC capacity ensures similar market outlooks – tightening under the higher GDP case, but remaining comfortable under lower GDP growth or faster efficiency gains.
IEA’s updated oil-supply projection for 2008-14 is an average 1.1 million b/d higher than in June, with more crude and NGL expected from members of the Organization of Petroleum Exporting Countries than in the earlier forecast. Much of the increase occurs late in the forecast period as previously deferred projects are revived and come on stream.
In the higher-GDP scenario, global non-OPEC supply plus OPEC production capacity rises from 90.94 million b/d in 2009 to 95.6 million b/d in 2014, with implied spare capacity among OPEC members of 6.08 million b/d in 2009 and 4.74 million b/d in 2014.
The non-OPEC global supply numbers include NGL production by OPEC members of 4.86 million b/d in 2009, rising to 7.35 million b/d in 2014. They also include biofuels supply expectations raised by an average of 35,000 b/d over 2008-14 from the June projection. IEA expects global biofuels production to rise from 1.6 million b/d in 2009 to 2.2 million b/d in 2014.
IEA hiked its projection for refining capacity growth by 1.1 million b/d from the June report to 8.7 million b/d for 2008-14. Dominating growth are China, 2.9 million b/d; other Asia, 2.1 million b/d; and the Middle East, 1.5 million b/d. IEA said delays on some large refining projects proved shorter than it originally assumed.