Unexpectedly strong deliveries in the United States lifted global oil demand for the final quarter of last year by 135 000 barrels per day (135 kb/d) higher than originally forecast, the IEA Oil Market Report (OMR) for January estimated on Tuesday. Curtailments in China and elsewhere partly offset the US increase, but the closing surge left growth for all of 2013 at about 12 million barrels per day (mb/d), which the monthly report expects to accelerate to 1.3 mb/d in 2014 as the economy continues to recover.

Global supplies eased 25 kb/d in December from the previous month, to 92.23 mb/d, as a seasonal decline in biofuel output cut non‐OPEC liquids supplies by 340 kb/d. Non‐OPEC production grew by 1.63 mb/d from December 2012. Year-on-year OPEC crude oil supply fell 535 kb/d in December, but it rebounded by 310 kb/d from the previous month, to 29.82 mb/d, reversing four months of decline. Saudi Arabia and the United Arab Emirates led the gain. Iraq was the only member to post a decline, though beleaguered Libya saw only a modest rise, amid government expectations of an imminent recovery in oil output.

The OMR raised its forecast of global refinery crude for the current quarter by 110 kb/d from the December report, to 76.8 mb/d, on the back of surging US crude runs. Global throughput in the quarter should grow 1.3 mb/d, up from only 0.3 mb/d in the last quarter of 2013, as contractions in Europe ease and new Chinese and Middle Eastern capacity ramps up.

Total OECD commercial oil inventories plummeted by 53.6 mb in November, their steepest monthly decline since December 2011, led by a plunge in crude oil and the OMR’s “other products” category. Preliminary data for December indicate a further 42.5 mb draw on OECD inventories.
Highlights of the latest OMR
•    Crude oil markets firmed in December on seasonally stronger winter demand in the Atlantic basin. Brent prices were supported by continued supply outages in Libya while WTI reflected a surge in domestic refinery throughputs. Prices eased in January, though, with WTI last trading at $93.70/bbl and Brent at $106.35/bbl.

•    The estimate of 4Q13 global oil demand was raised by 135 kb/d on unexpectedly strong US deliveries, partly offset by curtailments in China and elsewhere. For 2013 as a whole, growth is estimated at around 1.2 mb/d, accelerating to 1.3 mb/d in 2014 as the economy continues to recover.

•    Global supplies inched down by 25 kb/d month-on-month in December to 92.23 mb/d, with a seasonal fall in biofuel output cutting non-OPEC liquids supplies by 340 kb/d. Non-OPEC production grew by 1.63 mb/d year-on-year, partly offset by a 535 kb/d drop in OPEC crude oil supply.

•    OPEC crude oil supply rebounded by 310 kb/d to 29.82 mb/d in December, reversing four months of decline. Saudi Arabia and the UAE led the gain, while Iraq was the only member to post a decline. Beleaguered Libya saw only a modest rise in December, amid government expectations of an imminent recovery in oil output.

•    The forecast of global refinery crude runs for 1Q14 has been lifted by 110 kb/d since last month’s Report, to 76.8 mb/d, on the back of surging US crude runs. Global throughput growth for 1Q14 is assessed at 1.3 mb/d, up from only 0.3 mb/d in 4Q13, as contractions in Europe ease and new Chinese and Middle Eastern capacity ramps up.

•    Total OECD commercial oil inventories plummeted by 53.6 mb in November, their steepest monthly decline since December 2011, led by a plunge in crude oil and ‘other products’. Preliminary data for December indicate a further 42.5 mb draw in OECD inventories.
Source: IEA