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Highlights
of the latest OMR
dated: 11 May 2012
Crude markets reversed their upward course in April and by early May futures prices had fallen $10-12/bbl amid disappointing economic data for the US and Europe and an apparent easing of tensions between the international community and Iran. Brent crude was last trading near a three-month low of $113/bbl, with WTI at $97/bbl.
Global oil supply increased by 0.6 mb/d to 91.0 mb/d in April, 3.9 mb/d above last year. Higher Iraqi, Nigerian and Libyan supplies lifted OPEC production by 410 kb/d, to 31.85 mb/d. The ‘call on OPEC crude and stock change’ is raised by 0.2 mb/d to 30.9 mb/d for 3Q12 and by 0.4 mb/d to 30.7 mb/d for 4Q12, with the 2012 average now 30.3 mb/d.
Non-OPEC supply increased by 0.1 mb/d to 52.9 mb/d in April as a seasonal rise in biofuels output offset declining supplies in the UK and Canada. Despite persistent non-OECD outages in 2012, production growth in North America should average 0.6 mb/d for the remainder of the year, lifting non-OPEC supplies by 0.6 mb/d y-o-y to 53.3 mb/d.
Global oil consumption is set to rise by 0.8 mb/d (0.9%) in 2012, to 90.0 mb/d, with gains in the non-OECD more than offsetting declining OECD demand. After posting near-zero annual growth in 4Q11, global demand growth is forecast to gradually accelerate throughout 2012, culminating in an expansion of 1.2 mb/d by 4Q12.
OECD industry oil inventories increased by 13.5 mb in March, to 2 649 mb, lifting total stocks above the five-year average for the first time since May 2011. Moreover, forward demand cover rose by 0.5 day to 60.3 days, 3.0 days above the five-year average. Preliminary data indicate a modest 5.1 mb increase in industry stocks in April.
Global crude throughputs reached a seasonal low of 73.4 mb/d in April, coinciding with a peak in refinery maintenance. Crude runs are expected to rise sharply from May onwards, as refiners complete turnarounds and meet seasonally stronger demand. On a quarterly basis, global runs are expected to fall from 74.8 mb/d in 1Q12 to 74.3 mb/d in 2Q12, 150 kb/d and 440 kb/d respectively above 2011 levels.
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