July OPEC output up on Iraq, Nigeria restarts - IEA

10 August 2007 12:36  [Source: ICIS news]

LONDON (ICIS news)--OPEC producers increased crude supply 385,000 bbl/day in July to 30.5m bbl/day, reflecting the restart of previously shuttered Iraqi and Nigerian output rather than a policy shift to meet demand, the International Energy Agency (IEA) said on Friday.


In its monthly oil market report, the IEA said global oil supply was lagging demand in July, despite a 1.1m bbl/day monthly increase to 85.3m bbl/day.


However, monthly gains from non-OPEC producers were expected to be shortlived as maintenance and seasonal factors would likely reverse the July increase in August and September.


Benchmark WTI reached a record high of more than $78/bbl in July but moved into backwardation, falling back sharply on concerns over growth, the unwinding of speculative positions and poor refining margins, said IEA.


“High crude prices and increased refinery throughput further pressured already negative returns from marginal refineries in July, but these have subsequently recovered somewhat,” said the report.


Forecast global oil production remained unchanged at 86m bbl/day in 2007, 1.8% up over 2006, and 88.2m bbl/day in 2008, a rise of 2.5%.


IEA said a surge of demand for fuel oil and gasoil in Japan and several Gulf countries has been largely offset by downward revisions for non-OECD Asia and former Soviet Union (FSU) states.


Global refinery throughput was estimated at 73.3m bbl/day in July as scheduled and unscheduled shutdowns came to an end.


August throughput has been revised lower to 75.1m bbl/day to reflect economic run cuts and higher non-OECD maintenance activity, primarily in China and the FSU, said the IEA report.


By: Mark Watts
+44 20 8652 3214

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