IEA: OIL DEMAND UP
Crude prices firmed on the back of unscheduled supply outages in Nigeria, Ghana and Canada that exceeded 1.5 m/d by early May. This more than offset bearish sentiment in the wake of the mid-April Doha output talks. At the time of writing, crude oil prices were approaching 2016 highs: ICE Brent was $47.00/bbl. NYMEX WTI was $45.88/bbl.
Global oil supplies rose 250 kb/d in April to 96.2 mb/d as higher OPEC output more than offset deepening non-OPEC declines. Y-o-y world output grew by just 50 kb/d in April versus gains of more than 3.5 mb/d a year ago. 2016 non-OPEC supply is forecast to drop by 0.8 mb/d to 56.8 mb/d.
OPEC crude output rose by 330 kb/d in April to 32.76 mb/d as a 300 kb/d jump in Iranian flows and a boost in Iraqi and UAE supplies more than offset outages in Kuwait and Nigeria. Saudi output was steady near 10.2 mb/d. Iranian supply rose to 3.56 mb/d, a level last hit in November 2011 before sanctions were tightened.
Global oil demand growth for 1Q16 was revised upwards to 1.4 mb/d, led higher by strong gains in India, China and, more surprisingly, Russia. For the year as a whole, growth will be around 1.2 mb/d, with demand reaching 95.9 mb/d.
Stock builds are beginning to slow in the OECD; in 1Q16 they grew at their slowest rate since 4Q14 and in February they drew for the first time in a year. In March OECD commercial inventories fell by a slim 1.1 mb, with April preliminary data suggesting that stocks rebounded while oil held in floating storage rose.
2Q16 global refinery throughput is forecast at 79.6 mb/d, with 0.7 mb/d y-o-y gains falling below anticipated demand growth of 1.2 mb/d. The 1Q16 estimate has been revised higher by 0.2 mb/d to 79.5 mb/d. India and Saudi Arabia are set to lead global annual increases this year.
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BLOOMBERG - Treasury Secretary Steven Mnuchin told a Texas judge that Exxon Mobil Corp. doesn’t have a right to see privileged documents related to a $2 million fine assessed against the energy company for violating sanctions related to Russia’s 2014 invasion of Ukraine.
NPD - Preliminary production figures for June 2018 show an average daily production of 1 747 000 barrels of oil, NGL and condensate, which is an increase of 88 000 barrels per day compared to May.
NOVATEK - In the first half 2018, NOVATEK’s hydrocarbons production totaled 264.3 million barrels of oil equivalent (boe), including 32.93 billion cubic meters (bcm) of natural gas and 5,864 thousand tons of liquids (gas condensate and crude oil), resulting in an increase in total hydrocarbons production by 6.3 million boe, or by 2.4%, as compared to the first half 2017.
REUTERS - Brent crude futures LCOc1 were down 75 cents, or 1 percent, at $78.11 a barrel by 0308 GMT, having fallen as low as $77.60. U.S. crude CLc1 was down 55 cents, or 0.7 percent, at $73.56.