LONDON (ICIS)--The International Energy Agency (IEA) on Wednesday raised its global oil demand growth forecast by 145,000 bbl/day for 2013 on the back of stronger-than-expected data for Europe and the US in the third quarter.
Global demand for 2013 is now expected to rise by 1.2m bbl/day, to 91.2m bbl/day. A further gain of 1.2m bbl/day is forecast for 2014, to 92.4m bbl/day, the IEA added.
In its most recent oil market report, the IEA also said that industrial fuels, such as gasoil, liquefied petroleum gas (LPG) and naphtha, account for the bulk of this upward revision, reflecting the impact of economic recovery in the US and Europe.
“The petrochemical industry has seen something of a renaissance recently, lifting demand for petrochemical feedstock, while the shale gas and light tight oil (LTO) revolution in the US has cut LPG prices and incentivised higher use,” it added.
The report stated that strong gasoline demand in China and the US also played a key role in the strong gains in oil demand seen in those countries.
In addition, the IEA said OECD (organisation for economic co-operation and development) oil demand estimates for 2013 were raised amid mounting evidence that oil deliveries from the region swung to growth in the second quarter, reversing three consecutive quarters of year-on-year contraction.
“OECD oil demand flattened in 2Q13, with a net gain of 15,000 bbl/day seen, before accelerating in 3Q13, up 320,000 bbl/day y-o-y, having generally fallen from 2Q11 to 1Q13. Such upside is likely to be short-lived, as a post-recessionary bounce eases and the Asia Oceania region in particular returns to a trend of structurally falling consumption,” it added.
However, the IEA said non‐OECD economies were still forecast to lead global oil demand growth in 2013 and beyond.
Meanwhile, the forecast of global refinery crude runs for the fourth quarter of this year was cut by 330,000 bbl/day since the IEA’s last month’s report, on the back of exceptionally low European throughputs and weaker-than-expected runs in non-OECD Asia and Latin America.
Global throughputs are now projected at 76.3m bbl/day for the quarter, up just 180,000 bbl/day year on year.
However, growth in global crude runs is set to rebound in the first quarter of 2014, with throughput forecast at 76.7m bbl/day, up 1.2m bbl/day, led by growth in the Middle East and China.
Regarding refining margins, the IEA said there was a contrasting picture for refiners in US and non-US markets throughout November.
“After a mixed month in October, US margins experienced another surge in November spurred on by weakening domestic crude prices, which inflated cracks spreads. However, as cracks deteriorated in early-December on the back of strengthening crude prices, margins fell back,” it said.
“On the other hand, European refiners were hit as margins weakened after product prices fell and regional benchmark crude prices were supported by supply concerns. Elsewhere, Asian margins generally strengthened on the month following a number of regional refineries entering maintenance,” the IEA added.