The International Energy Agency is out with its latest survey of the oil market, and it includes a number of juicy tidbits.
First, a roundup of the very tight supply situation:
OPEC supply continued its downward trend in April, with Libyan
supply shuttered in the wake of the worsening civil war. April OPEC
output was pegged at 28.75 mb/d, off by 235 kb/d from March and
1.3 mb/d below January levels. The ‘call on OPEC crude and stock
change’ rises by 800 kb/d from an average of 29.3 mb/d in 2Q11 to
30.1 mb/d in 3Q11.
OECD industry stocks declined by 9.2 mb, to 2 643 mb or 58.8 days
cover in March, as seasonal refinery maintenance substantially
reduced product stocks. Preliminary April data indicate a 29.9 mb
increase in commercial OECD inventories, while oil held in short‐term
floating storage fell.
And on the demand side, here comes the cleaver:
Forecast global oil product demand growth for 2011 is trimmed on
persistent high prices and weaker IMF GDP projections for advanced
economies. Global demand, which averaged 87.9 mb/d in 2010
(+3.3% or +2.8 mb/d year‐on‐year), is projected to reach 89.2 mb/d in
2011 (+1.5% or 1.3 mb/d versus the previous year).
And for the first time in ages, demand hits stall speed:
Yet our own estimates for global oil demand show a marked slow‐down, with preliminary March data suggesting near zero annual growth for the first time since summer 2009. While March estimates are
probably distorted by exceptional events in Japan and the timing of Easter holidays, nonetheless $4/gallon (€0.7/litre) gasoline is likely to yield an anaemic US driving season.
This is the main change to our demand forecast – a weaker 2011 profile in North America. Meanwhile, governments in Russia, Brazil and China face difficulties fully passing on recent price rises to consumers, helping to sustain robust demand growth in the non‐OECD countries. Potential power supply problems in China might augment that trend.
This chart spells it out nicely.
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