LONDON (ICIS)--The International Energy Agency (IEA) on Friday raised its 2014 global oil demand growth forecast slightly by 10,000 bbl/day as the macroeconomic backdrop improves.
Global oil demand for 2014 is forecast to rise by 1.3m bbl/day in 2014, or 1.5%, to 92.8 m bbl/day.
In its June oil market report, the IEA added that global oil demand is set to increase sharply from a low of 91.4m bbl/day in the first quarter to a high of 94m bbl/day in the fourth.
The IEA also said global supplies rose 530,000 bbl/day in May, to 92.6m bbl/day, “mostly on an increase in non‐OPEC production” of 440,000 bbl/day.
OPEC supplies rose by 85,000 bbl/day to 29.99m bbl/day in May, as declines in Libya were offset by increased Saudi output, the report said. The IEA also said global refinery crude demand fell to a seasonal low of 75.9m bbl/day in April on maintenance and weak margins.
With regards to pricing, oil futures prices for Brent rose above $112/bbl on Thursday 12 June, a gain of roughly $2.50/bbl from previous levels and the highest level in 2014, on the back of a military campaign by Sunni insurgents in Iraq and continued supply outages in Libya.
“Perception of heightened political risk in North Africa and the Middle East and chronic disruptions in Libyan exports have been a feature of the market for some time, but so far have been largely offset by record growth in non‐OPEC supply,” the IEA said.
“Recently, high crude imports into China, likely for expanding the country’s strategic reserves, also have pulled as much as 1.2 m bbl/day of additional crude demand in April and May, roughly equivalent to the current losses in Libyan production versus pre‐Civil War levels, providing additional support to markets,” it added.
However, the IEA said the latest events in Iraq, if the conflict does not worsen, may not “put additional Iraqi oil supplies immediately at risk because production from the north of the country, averaging around 250,000‐300,000 bbl/day in 2013‐early 2014, had already been off the market since early March due to violence in Anbar province and attacks on the Kirkuk‐Ceyhan pipeline linking supply from Iraq’s northern fields to world markets via Turkey”.