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2014-06-25 19:00:00

GLOBAL OIL: AVAILABILITY & PRICE

GLOBAL OIL: AVAILABILITY & PRICE

March - April 2014 Update

The U.S. Energy Information Administration (EIA) estimates that the global petroleum and other liquids consumption outpaced production in March and April, resulting in a 0.1-million-bbl/d average implied withdrawal from global oil stocks The recent withdrawals were similar to the previous two-month period. Global surplus crude oil production capacity remains low and unplanned global supply disruptions remain elevated compared with historical levels, both indicating continued general market tightness.

North Sea Brent front month futures prices averaged about $108/bbl from March 3 to April 22, nearly unchanged from the previous two-month average and about $1/bbl higher than this time last year.

Global petroleum and other liquids consumption in March and April averaged 90.9 million bbl/d, relatively unchanged from the previous two-month period and 1.5 million bbl/d higher than the same time last year. Developing and emerging countries accounted for almost all of the consumption growth, led by China.

Global petroleum and other liquids production in March and April averaged 90.8 million bbl/d, 0.2 million bbl/d higher than the previous two-month period and 1.0 million bbl/d higher than the same time last year. Production from countries outside of the Organization of the Petroleum Exporting Countries (OPEC) grew by 1.7 million bbl/d compared with the same time last year, more than offsetting lower output from OPEC countries, particularly Libya.

Global surplus crude oil production capacity averaged 2.1 million bbl/d in March and April, 0.2 million bbl/d higher than the average during the previous two-month period but 0.5 million bbl/d lower than the year-ago level. The estimate of effective surplus capacity does not include additional capacity that may be technically available in Iran, but which is offline due to the impacts of U.S. and European Union (EU) sanctions on Iran's ability to sell its oil.

The estimated small stock draw during March and April is reflected in the relative stability of backwardation (when near-term prices are greater than further dated ones) in the Brent futures curve. The 1st-13th month spread for the Brent futures curve averaged about $6/bbl for the five-trading-days ending April 22, nearly unchanged compared to the five-trading-day-period ending February 25.

OPEC crude oil supply disruptions averaged 2.6 million bbl/d in March and April, 0.3 million bbl/d higher than the average in January and February because of increased disruptions in Libya and Iraq. Libya continues to experience swings in production. Unplanned supply disruptions among non-OPEC producers averaged 0.6 million bbl/d in March and April, 0.1 million bbl/d lower than the average in January and February mainly because of fewer outages in Brazil and no outages in the North Sea, Indonesia, and China in March and April. EIA's estimates of unplanned outages account for crude oil only among OPEC producers and all liquid fuels among non-OPEC producers. These estimates of unplanned outages exclude normal maintenance and reflect the level of volumes shut in relative to an assessment of effective production capacity, which is periodically updated.

Iran's petroleum and other liquids production averaged 3.4 million bbl/d in March and April, of which 2.8 million bbl/d was crude oil. Iran's liquid fuels production remains below the previous three-year average of 3.8 million bbl/d. Iran's crude oil production and exports have been reduced by sanctions that have impeded its ability to carry out investment in oil projects necessary to offset natural declines in production. Sanctions have also limited Iran's ability to sell oil. The Joint Plan of Action (JPOA) between the five permanent members of the United Nations Security Council (the United States, United Kingdom, France, Russia, and China) plus Germany (P5+1) and Iran that came into effect on January 20, 2014, provides limited sanctions relief to Iran, while leaving in place the core sanctions affecting Iran's oil sector. EIA's liquids estimates of Iran's production and use, and the implied level of exports, have not changed appreciably in the months following the announcement of the JPOA. However, EIA is currently reviewing its past and current estimates of Iran's non-crude oil production, which could lead to revisions in upcoming reports in this series. EIA will continue to assess the situation.

U.S. domestic crude oil prices remain subject to the local supply and demand dynamics of the Midwest and U.S. Gulf Coast. The price spread between Brent, a global waterborne light sweet crude, and West Texas Intermediate (WTI) continued to decrease in March and April compared with the previous two-month period. WTI averaged about $101/bbl in March and April, an increase of about $4/bbl from its January and February average.

EIA revised the preliminary estimates of petroleum and other liquids production and consumption for January and February 2014 published in the previous edition of this report. Global petroleum and other liquids production was revised upward by 0.4 million bbl/d to average 90.6 million bbl/d, while global consumption was revised upward by 0.2 million bbl/d to average 90.8 million bbl/d, resulting in implied global stock draw of 0.2 million bbl/d. Surplus crude oil production capacity was revised downward by 0.3 million bbl/d to average 1.9 million bbl/d, mostly reflecting higher production in Saudi Arabia than expected in January and February.

eia.gov

Tags: EIA, OIL