Oil Spot Blog

The International Energy Agency on Aug. 11 revised up its global oil demand forecast for 2010 and 2011 on stronger Gross Domestic Product assumptions and baseline adjustments.  

The agency said in its August Oil Market Report that it now sees world oil consumption at 86.6 million bpd in 2010, up 1.8 million bpd or 2.2 percent higher on a year-on-year basis. Global demand for 2011 is seen at 87.9 million bpd in 2011, up 1.5 percent or 1.3 million bpd, said the agency.

However, the IEA had some caveats, saying that weaker economic recovery, a third lower than the base case, would cut the 2010 and 2011 prognoses by 290,000 bpd and 1.2 million bpd, respectively.

On supply, the Paris-based agency that acts as an energy advisor to the Organization for Economic Cooperation and Development said global oil supply rose 850,000 bpd to 87.2 million bpd in July, as Norwegian maintenance ended and the Organization of the Petroleum Exporting Countries boosted supplies.

The EIA hiked 2010 supply estimates for nonmembers of the OPEC to 52.6 million bpd, and said those supply estimates would rise to 52.9 million bpd in 2011.

“BP has plugged its leaking well in the Gulf of Mexico, but we now identify 60,000 bpd of potential lost output due to regional project delays in 2010, rising to 100,000 bpd in 2011,” said the agency. 

It said OPEC crude oil supplies edged up 220,000 bpd to 29.2 million bpd in July on higher output from Nigeria and the United Arab Emirates. The “call on OPEC crude and stock change” is reduced by 100,000 bpd for both this year and 2011 to 28.8 million bpd and 29.1 million bpd, respectively. OPEC NGLs are forecast to rise by 600,000 bpd to 5.9 million bpd in 2011, similar with the growth rate for 2010.

On inventories, the IEA said industry stocks held by OECD countries fell by 800,000 bbl in June to 2.760 billion bbl, or 61.0 days of forward demand cover. Preliminary data point to a seasonal 21.5 million bbl build in the OECD in July, driven by product increases in the U.S., while crude and products held in short-term floating storage fell.

The agency also revised up global refinery crude throughputs by 425,000 bpd for the second quarter on strong European runs, saying that at 73.9 million bpd, second quarter global runs were 1.8 million bpd higher year-on-year, with growth underpinned by expansions in China and a recovery in U.S. refinery activity. Forecast third quarter runs were hiked to 74.7 million bpd, 1.1 million bpd above third quarter 2009.