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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