IEA revises global oil demand forecast
The International Energy Agency, in its August Oil Market Report, estimates that global oil demand will contract in 2009 by 2.3 million b/d vs. 2008 and average 83.9 million b/d.
OGJ Senior Editor-Economics
HOUSTON, Aug. 12 -- The International Energy Agency, in its August Oil Market Report, estimates that global oil demand will contract in 2009 by 2.3 million b/d vs. 2008 and average 83.9 million b/d. In its previous monthly report, the agency called for demand to shrink by 2.5 million b/d this year.
IEA’s demand outlook for 2010, nearly unchanged from a month earlier, is expected to climb 1.3 million b/d. The global oil demand forecast for 2010 has been revised up by 70,000 b/d to 85.3 million b/d, given a stronger outlook in Asia among countries outside the Organization for Economic Cooperation and Development.
OECD oil demand in 2010 is pegged at 45.1 million b/d, which is 25,000 b/d lower than IEA previously expected. But the estimate for oil demand in 2009 has been slightly revised up by 20,000 b/d to 45.1 million b/d, following a small adjustment in OECD Pacific demand. The agency commented that the latest data appear to confirm that the US gasoline season failed to materialize for the second year in a row.
IEA has revised up its forecast for non-OECD oil demand for both 2009 and 2010, largely following a reappraisal of Chinese demand prospects. Non-OECD demand in 2010 is now expected to average 40.1 million b/d, up 1.3 million b/d from 2009 and 100,000 b/d higher than the agency’s previous assessment.
IEA noted that even though energy-intensive non-OECD countries will largely drive global demand growth, the rise expected next year will nonetheless be below the 2004-08 average of 1.5 million b/d/year.
The Paris-based agency’s 2009 forecast of 38.8 million b/d puts non-OECD oil demand up 140,000 b/d vs. 2008. IEA said that this estimate is 170,000 b/d higher than in its previous oil market report due to much stronger direct crude burning for electric power generation in Saudi Arabia and a persistent drought in India. Lack of normal seasonal monsoon rain in India has boosted gas oil use in agricultural activities for irrigation and in power generation, since hydropower output in June was almost 10% lower on an annual basis.
IEA has raised its forecast for 2009 non-OPEC supply by 160,000 b/d, largely due to stronger than expected Russian output but also due to higher US NGL and Gulf of Mexico production and a rapid ramp-up at new Canadian oil sands mining operations.
IEA raised by 200,000 b/d its 2010 forecast for non-OPEC supply, as many of the same factors are carried forward through the outlook, the agency said.
As a result, total non-OPEC supply is now forecast at 51 million b/d in 2009, and 51.4 million b/d in 2010. IEA’s “call on OPEC crude and stock change” now averages 27.7 million b/d in 2009, and 27.8 million b/d in 2010.
OECD industry stocks rose counter-seasonally by 8.5 million bbl in June to 2,749 million bbl, 5.5% above last year’s level, IEA reported, as an increase in gasoline and distillate more than offset declines in crude oil and fuel oil. A North American crude stockdraw outweighed crude gains elsewhere.
The biggest storage additions came in European crude and North American light distillates, while North American crude posted the largest drop, IEA said. At the end of June, forward demand cover was unchanged vs. May at 61.7 days.
Preliminary July data indicate total OECD industry oil inventories fell by 3.6 million bbl, although the movements of crude and products differed. Crude stocks drew by 12.9 million bbl, led by decreases in Japan and the EU-16 countries. Product stocks increased 9.3 million bbl, led by gains in US distillate stocks, IEA said.
Crude in floating storage declined to around 55 million bbl at the end of July, from 70 million bbl at the end of June. Products in floating storage—mostly middle distillates—rose above 60 million bbl from 50 million bbl a month earlier, IEA reported.
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