Crude futures set new records above $110/bbl in early April, driven by tight distillate markets, strong non-OECD imports and a weaker dollar. Refining margins remain extremely volatile, reverting into positive territory in recent weeks following a large US gasoline stock draw, which has tightened regional supplies.
Global oil product demand has been revised down by 310 kb/d in 2008 to 87.2 mb/d following the downgrading of global GDP prospects by the IMF, coupled with a change in FSU methodology and baseline data revisions. By the same token, 2007 demand is up by 140 kb/d over last month’s report to 86.0 mb/d. As a result of these divergent shifts, demand growth in 2008 is now expected at almost 1.3 mb/d or 1.5% over 2007.
Global oil supply fell by 100 kb/d in March to 87.3 mb/d, led by lower supplies last month from OPEC, the North Sea and non-OPEC Africa. Non-OPEC supply growth in 2008 is trimmed to 815 kb/d on a broad swathe of adjustments in the Americas, Africa and Europe.
OPEC crude supply fell by 265 kb/d in March to 32.1 mb/d, on field maintenance in UAE, Nigeria and Venezuela. Pipeline/power outages highlighted ongoing risks to production in Iraq and Nigeria amid effective spare capacity of just 2.3 mb/d. Weaker economic growth cuts the 2008 call on OPEC by 0.3 mb/d to 31.6 mb/d.
OECD total industry stocks fell by 48.9 mb in February, to 2,579 mb, offsetting a similar rise in January. The February draw leaves inventories At 53.3 days of forward demand. With preliminary data indicating a build of just 6.3 mb in March, OECD end-1Q08 stocks remain close to end-December levels.
Global refinery throughput weakened in March, as poor margins curbed crude runs in all OECD regions. Estimated 1Q08 global throughput is unchanged at 74.0 mb/d. However, 2Q08 estimates have been cut by 0.2 mb/d to 73.7 mb/d, in line with weaker demand.
Friday, April 11, 2008