Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Mar. 5 -- Crude oil exports from the Organization of Petroleum Exporting Countries, excluding Angola and Ecuador, are forecast to fall by 430,000 b/d in the 4 weeks before Mar. 21, according to tanker analyst Oil Movements.
"The downhill race between OPEC supply restraint and falling oil demand is still in contention," said Oil Movements, which forecast exports based on spot and term chartering, in its Mar. 5 report.
"Data showing up the sharp rate of decline in production and exports in key economies in the fourth quarter is likely to feed into another round of downward revisions to oil demand forecasts for this year," it said.
"The upcoming monthly supply-demand review from the [International Energy Agency] will surface 2 days before OPEC's ministerial meeting, probably too late to have any impact on the outcome," the analyst said.
Another round of cuts is looking likely to be the default option, absent evidence that prices are moving north in any significant way (other than from the help given by dollar appreciation).
Latest estimates for OPEC sailings run up to the third week of March, and show an ongoing decline, but at a rate that would locate the completion date for December supply targets—for production, rather than sailings-exports—in the next quarter.
Sailings have been heading south in succeeding 4-week intervals since mid-November, but have yet to record changes big enough to get down to target volume quickly.
"However, it is just possible that the rate of decline will accelerate significantly in what remains of this month," said Oil Movements.
Recent estimates of sailings are being heavily influenced the 4-week period ending in late February when Middle East spot bookings hit an exceptional high.
In the interval covering the remainder of March, that big number will fall out of the reckoning.
The profile of February loading fixtures was heavily influenced by the surge late in the month. March-loading fixtures are accumulating slowly, and look set to fall short of the February total.
Bigger falls in total spot and period sailings seem to be under way.
"From OPEC's point of view, the current rate of decline in sailings may be slower than they would like it to be; but it is nevertheless happening faster than in any recent period," the analyst said.
The OPEC Sailings chart plots 52-week averages—removing seasonal distortions—for the group's sailings. Using smoothed time shows relatively sharp decline under way through the year to date.
Cuts in sailings following the round of quota reductions in the winter of 2006-07 went on through most of the following year measured in this way, and the current round is closing on the low points reached in that phase.
Contact Eric Watkins at [email protected].
