LONDON (ICIS)--The International Energy Agency (IEA) on Thursday raised its global oil demand forecast for 2014 slightly to 92.8m bbl/day on the back of higher data for the first quarter of the year.
The forecast increase is driven by an uptick in demand from non-OECD countries, in particular India, China and Saudi Arabia.
Crude supplies also rose 700,000 bbl/day in April, the IEA added, with roughly half the increase due to production increases from OPEC producers.
OPEC crude oil production was down 960,000 bbl/day compared to the same period in 2013, but a 1.8m bbl/day output increase for non-OPEC producers more than offset that decline, leaving total global crude production up 820,000 bbl/day year on year during the month, according to IEA.
Despite the year on year decline in OPEC production during April, output of 29.9m bbl/day indicates a rebound from March output levels, when production was a at a five-month low.
Nevertheless, global refinery crude output hit a seasonal low in April, IEA said, on the back of plant maintenances in OPEC and non-OPEC countries and seasonally low demand. Refinery runs are predicted to rise steeply until August as more refineries come back onstream and demand increases, IEA added.
Turnarounds and outages helped to support a slight month on month increase in crude prices during April, helped further by rising tensions between Russia and Ukraine.
Despite fears over the impact of any escalation in the current situation, which has seen the Donetsk region claim independence following a disputed referendum, Russian oil demand remained strong at 3.4m bbl/day in March, representing a 5.3% increase and 13 consecutive months of growth, IEA said.
OECD oil demand contracted by 0.1% year on year in February and expanded by 0.4% in March, with the flattened demand over the period potentially representing a longer-running trend, as the bloc struggles to deal with economic stagnation and structural issues, according to IEA.
“Despite signs of a rebound in oil demand in 2013, OECD oil markets remain entrenched in long-term structural decline as anticipated efficiency gains outstrip the effect of economic growth,” IEA said in its April oil market report.
“The [second-quarter 2013 to fourth-quarter 2013] saw a break from this trend, as OECD economic momentum swung quickly from near recessionary conditions to renewed growth, but oil demand gains look unlikely to outlast that economic bounce,” it added.
Improved non-OECD oil demand is likely to remain a fixture of 2014 due to gradually improving economic drivers, IEA added.
“Momentum is likely to build over the course of the year as the underlying macroeconomic situation improves. Total non‐OECD deliveries are forecast to average out at around 45.8m bbl/d in 2014, 3.1% up on the year,” IEA said.