The International Energy Agency (IEA) on Wednesday again revised down its forecast for global oil demand in 2011 and 2012 amid lower projections for global gross domestic product (GDP) growth.
A summary of their monthly oil market report is as follows:
Oil futures tracked latest economic developments amid the worsening European debt crisis, which triggered downward price moves throughout September, the IEA said.
Prices partially recovered on renewed optimism that European leaders would address euro-zone financing issues, with WTI last trading at $84.50/bbl and Brent near $108/bbl.
Global oil demand was revised down by 50,000 bpd for 2011 and by 210,000 bpd for 2012 with lower-than-expected third-quarter readings in the non-OECD and a downward adjustment to global GDP growth assumptions, according to the agency.
Global GDP growth is now seen at 3.8% in 2011 and 3.9% in 2012 with significant downside risks. Demand estimates stand at 89.2 miiion bpd in 2011 (+1.0 million bpd year on year) and 90.5m bpd in 2012 (+1.3 million bpd year on year).
Global oil supply fell by 300,000 bpd to 88.7 million bpd in September from August, due to non-OPEC outages. Non-OPEC supply projections are trimmed by 300,000 bpd for the 2011 fourth quarter and by 200,000 bpd for 2012, with annual growth averaging 200,000 bpd, to 52.8 million bpd, and by 900,000 bpd to 53.6 million bpd for 2011 and 2012 respectively.
OPEC natural gas liquids (NGL) output averages 5.9 million bpd in 2011 and 6.3 million bpd in 2012.
OPEC crude oil supply nudged down to 30.15 million bpd in September, with lower Saudi Arabian and Nigerian output partly offset by resumed Libyan supply.
Output there reached 350,000 bpd in early October and capacity is assumed at 600,000 bpd by end-year. The fourth-quarter call on OPEC crude and stock change is adjusted up by 300,000 bpd to 30.8 million bpd on lower non-OPEC supply, with the 2012 call unchanged at 30.5 million bpd.
OECD industry oil stocks fell counter-seasonally in August by 3.4 million bbl. Preliminary September data suggest a further 12.7 million bbl decline in OECD industry stocks and a drop in short-term floating storage. OECD stocks since July fell below the five year average for the first time since June 2008.
Global crude runs estimates for the third and fourth quarters of 2011 are revised down by 50,000 bpd and 75,000 bpd, respectively, versus last month.
Lower-than-expected Asian throughputs are partly offset by continued robust US runs. Global throughputs now average 75.5 million bpd in the third quarter and 75.3 million bpd in the fourth.
Meanwhile, OECD refinery rationalization continues, according to the IEA.