• Crude oil benchmarks were locked in a narrow range during October as continuing oversupply in world markets and a strong US dollar limited the impact of strikes in Brazil and geopolitical tensions. At the time of writing, ICE Brent was trading at $44.43/bbl and NYMEX WTI at $41.75/bbl.
  • Global demand growth is forecast to slow to 1.2 mb/d in 2016 after surging to a five-year high of 1.8 mb/d in 2015. Momentum eases towards its long-term trend as recent props – sharply lower oil prices, colder-than-year earlier winter weather and post-recessionary bounces in some countries – are likely to give way.
  • Global oil supplies breached 97 mb/d in October, as non-OPEC output recovered from lower levels the previous month. Despite the resilience of producers such as Russia, non-OPEC supply is forecast to contract by more than 0.6 mb/d next year. US light tight oil (LTO), the driver of non-OPEC growth, is expected to decline by 0.6 mb/d in 2016.
  • OPEC crude supply held steady in October at 31.76 mb/d with declines in Iraq and Kuwait offset by higher supply from Libya, Saudi Arabia and Nigeria. A slight tightening in fundamentals lifts the 2016 ‘call’ on OPEC by 0.2 mb/d from last month’sReport to 31.3 mb/d.
  • OECD commercial inventories rose counter-seasonally by 13.8 mb to stand at a record near 3 billion barrels by end-September. The pace of global stockbuilding slowed during the third quarter to 1.6 mb/d from 2.3 mb/d in 2Q15, but remained significantly above the historical average.
  • Global refinery runs sank by 1.2 mb/d in October to 78.2 mb/d with seasonal maintenance in full swing, leading to a significant reduction in annual throughput growth. Margins edged lower in October versus September but remained robust despite high product stocks.
Posted in: IEA