Global oil supplies fell by 155 000 barrels per day (155 kb/d) in May to 96 million barrels per day (mb/d) on lower non-OPEC output, but remained at a steep 3 mb/d above the level of May 2014, the IEA Oil Market Report (OMR) for June informed subscribers. Annual growth slowed marginally from March and April and remained roughly split between non-OPEC and OPEC countries. The June issue raised the forecast of non-OPEC supply growth for 2015 by 195 kb/d to 1 mb/d.
OPEC supply edged up 50 kb/d in May to 31.33 mb/d, the highest rate since August 2012. Saudi Arabia, Iraq and the United Arab Emirates pumped at record monthly rates to keep output more than 1 mb/d above OPEC’s official supply target for a third month running. Oil ministers agreed to maintain that target at their 5 June meeting.
The estimate of global demand growth has been revised up to 1.7 mb/d for the first quarter of 2015 and 1.4 mb/d for all of 2015. Momentum is expected to ease somewhat the current quarter, assuming a return to normal weather conditions and given the recent partial recovery in oil prices.
Global refinery crude runs reached an estimated 77.9 mb/d in April, 0.3 mb/d lower than March, and 1.7 mb/d above a year earlier. Delayed new capacity of 1.5 mb/d in non-OECD regions has lifted product cracks and OECD refining utilisation rates, and caused backwardation to re-appear in oil products markets. (Backwardation is the market situation in which futures prices are progressively lower in the distant delivery months.)
OECD industry oil stocks built by a steep 38.0 mb in April, to stand 147 mb above average levels, as refined-product stocks moved to their widest surplus in more than four years. Preliminary data indicate that OECD inventories added a further 12.6 mb in May, though US crude stocks posted their first draw in nine months.