IEA's June report sees slight uptick in OPEC output

13 July 2007 11:41  [Source: ICIS news]

LONDON (ICIS news)--The International Energy Agency (IEA) estimated total OPEC production for June, including Iraq and Angola, at at 30.16m bbl/day, slightly up from May's figure of 30.07m bbl/day, the agency said on Friday. 

 

In its monthly oil market report, the Paris-based IEA put June production for the OPEC 10 at 26.62m bbl/day, compared with the target set with effect from 1 February of 25.84m bbl/day.

 

Brent futures surged over $77/bbl on 12 July on tight fundamentals, increased geopolitical tension and indications of strong fund buying.

 

Falling refining margins suggest that market tightness is shifting from product to crude markets.

 

Global oil product demand is expected to rise by a robust 2.5% to 88.2m bbl/day in 2008, largely due to a weather-related rebound in the OECD and strong demand in non-OECD countries.

 

This represents an increase of 2.2m bbl/day, from the slightly revised (-0.1m bbl/day) 2007 level of 86.0m bbl/day.

 

Non-OPEC supply in 2008 is forecast to reach 51.0m bbl/day (+1.0m bbl/day), plus 5.5m bbl/day of OPEC natural gas liquids (+0.7m bbl/day).

 

Key growth drivers include increased production from former Soviet Union states and Latin America and global biofuels demand. OECD Europe and North America continue to see production declines, despite strong growth from the US Gulf of Mexico and Canada's oil sands.

 

OPEC capacity is set to rise by 1m bbl/day in 2008 to an average of 35.4m bbl/day, but spare capacity will depend to a large extent on OPEC production levels both in the second half of 2007 and next year.

 

Global refinery crude throughput increased by 0.2m bbl/day in May to 72.7m bbl/day and is 0.4m bbl/day higher year on year. Crude throughput is forecast to increase rapidly to an August peak of 75.2m bbl/day, on the back of higher runs in the OECD and the Middle East.

 

Preliminary end-June OECD stock data show an increase of 7.8m bbl, as increases in the US and Japan offset a sharp downturn in Europe.

 

Together with an average 21.2m/bbl rise in stocks in April and May, this implies a second-quarter stock build of around 550,000 bbl/day and forward demand cover at end-June unchanged at 53.6 days.

 

By: Tony Dillon
+44 20 8652 3214

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