Oil prices extended earlier gains in August, but crude prices seemed to plateau in the second half of the month. Brent was last trading at $115/bbl after reaching a high of near $117/bbl around mid-August, while WTI traded at $97, close to its August high. Increases in product prices outpaced and outlasted the crude rally, with gasoline, naphtha and middle distillate prices all posting steep gains. Demand projections for 2012 and 2013 have been raised by 100 kb/d on data revisions for 2011, to 89.8 mb/d and 90.6 mb/d, respectively, though demand growth forecasts are little changed at around 0.8 mb/d for both years. Demand grew by 1.2 mb/d in 2Q12, buoyed by Japanese utility burn to replace idled nuclear generators..
Global oil supply fell by 0.1 mb/d m-o-m to 90.8 mb/d in August from upwardly revised July estimates. OPEC liquids production growth, led by Nigeria, Angola and Iraq, failed fully to offset unplanned outages in non-OPEC countries. Crude oil imports from Iran are estimated to have inched up in August to 1.1 mb/d, from below 1 mb/d in July. Non-OPEC annual supply growth slowed to just 0.2 mb/d in 3Q12.
The ‘call on OPEC crude and stock change’ is projected to rise by 1.3 mb/d in 3Q12 to 31.1 mb/d, on the back of a seasonal, quarter-on-quarter uptick in demand of 1.4 mb/d.
Improved refining margins spurred steep gains in OECD refinery runs in July and August, lifting global crude throughput estimates for 3Q12 to 75.7 mb/d, up 1.3 mb/d on 2Q lows and 450 kb/d y-o-y. Non OECD gains are projected to keep runs flat through 4Q12, lifting annual growth to 1.3 mb/d.
OECD industry crude stocks contracted by 16.5 mb in July and a preliminary 23.7 mb last month on strong refining crude runs. Products built by 32.8 mb and 4.2 mb, respectively. Total industry oil builds of 10.6 mb for July were below normal and preliminary data hint at counter-seasonal draws in August.
Source: IEA