12 April 2012 15:39 [Source: ICIS news]
SINGAPORE (ICIS)--The International Energy Agency (IEA) said on Thursday that oil market fundamentals in the first quarter of 2012 show a clear shift away from what it describes as the seemingly relentless tightening which has prevailed since the third quarter of 2009.
According to the latest IEA report, supply tightness has eased in the first quarter of 2012 on a combination of an increase of 1.2m bbl/day in OPEC supplies from the previous quarter and sluggish oil demand. These developments have led the IEA to believe there has been a potential global build in oil stocks of over 1m bbl/day, despite disappointing non-OPEC output.
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As a result, crude prices have recently lost most of the $5/bbl they gained in March, the IEA said.
The IEA estimates that offtake of Iranian crude by traditional buyers such as
The IEA said that: “March OPEC supply held near three-and-a-half year highs, up by 135,000 bbl/day to 31.43m bbl/day”.
Saudi Arabian production was unchanged at a very high 10m bbl/day in March. The IEA expected Saudi output to trend even higher over the next few months based on customer nominations and tanker loading forecasts.
Meanwhile, non-OPEC supply fell by 500,000 bbl/day in March to 52.7m bbl/day. The non-OPEC output decline was widespread, but most notable in the
The IEA retained fairly cautious view on the recovery in non-OPEC production from recent outages, but nonetheless it believes supply growth will accelerate in the second half of 2012.
The IEA expects global oil demand to rise to 89.9m bbl/day in 2012, a gain of 800,000 bbl/day (0.9%) on 2011, which is largely unchanged from its previous forecast.
Consumption is forecast to hit a low in the second quarter at 88.6m bbl/day, on weak seasonal products demand, high prices and a faltering economic recovery, the IEA said. However, it estimates that demand will strengthen through to the end of 2012 on an improvement in global economic growth.
IEA said that OECD industry total oil inventories fell by 12.4m bbls in February, to 2,630m bbls, which is less than a third of the historical average decline of 38.8m bbls. Meanwhile, forward demand cover also rose 1.2 days to 59.6 days. March preliminary data show a 22.6m bbl increase in OECD industry inventories, it added.
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