IEA expects lower 2007 oil product demand growth

14 December 2007 11:03  [Source: ICIS news]

LONDON (ICIS news)--Global oil product demand growth was revised lower by 60,000 bbl/day, or 1.1%, in 2007 to average 85.7m bbl/day, the International Energy Agency (IEA) said in its monthly oil market report on Friday.

 

Following a reappraisal of ethane prospects in the Middle East, 2008 demand was revised higher by 115,000 bbl/day, or 2.5%, with growth driven by the non-OECD as and assumption of normal weather in the OECD, said IEA.

 

World oil supply rose 55,000 bbl/day in November to 86.5m bbl/day as output recovery in Mexico, China and Brazil offset lower OPEC supply.

 

Non-OPEC supply was revised up by an average of 50,000 bbl/day to 50.2m bbl/day in 2007 and 51.25m bbl/day in 2007 on higher estimates for refinery processing gain. These offset downgrades of 95-140,000 bbl/day for non-OPEC oil production.

 

November OPEC crude supply averaged 31.1m bbl/day, which was 180,000 bbl/day lower than October, as offshore maintenance in Abu Dhabi offset increases from other producers.

 

The IEA said early indications show rising supply in December despite an unchanged OPEC output target.

 

Crude futures tested $100/bbl in late November, but dipped on signs of higher supplies from OPEC/non-OPEC producers and improved product supply as refineries return from maintenance, said the report.

 

“However, $90/bbl oil and significant price volatility still reflect underlying concerns over supply and economic growth,” it said.

 

OECD industry stocks fell by 22.4m bbl in October, lowering demand cover to 52.6 days – just below the five-year average.

 

The IEA said a sharp decline in European products led the draw, with a similar picture emerging in November.

 

Global refinery crude runs were forecast to average 74.9m bbl/day in December as throughput reaches its seasonal peak.

 

Throughputs were expected to remain at these levels in January but average 74.3m bbl/day in the first quarter of 2008, 1m bbl/day above the year earlier period.

By: Mark Watts
+44 20 8652 3214

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