The OPEC Reference Basket rose 19¢ to average $45.02/b in October, the third month in a row around this level. Crude oil futures increased at a faster pace with ICE Brent increasing 75¢ to $49.29/b and Nymex WTI gaining 82¢ to stand at $46.29/b. Speculator net length declined as short positions increased. The Brent-WTI spread narrowed to average close to $3/b in October.

World Economy
World economic growth remains modest at 3.1% in 2015, mainly due to a continued slowdown in emerging and developing economies, as well as low US growth in the third quarter, and global economic growth is expected to improve to 3.4% in 2016. US growth has been revised to 2.4% in 2015 and 2.5% in 2016, while total OECD growth remains at 2.0% for 2015 and 2.1% for 2016. Figures for China and India remain unchanged at 6.8% and 6.4%, and 7.4% and 7.6%, respectively.

World Oil Demand
World oil demand is expected to grow by 1.50 mb/d in 2015 to average 92.86 mb/d, unchanged from the previous report. In 2016, world oil demand growth is seen reaching 1.25 mb/d, in line with the previous month’s assessment, to average 94.14 mb/d.

World Oil Supply
Non-OPEC oil supply is estimated to average 57.24 mb/d in 2015, an increase of 0.72 mb/d, unchanged from the previous month’s estimation. The forecast for 2016 non-OPEC oil supply remained unchanged, showing a contraction of 0.13 mb/d to average 57.11 mb/d. OPEC NGLs in 2016 are forecast to increase by 0.17 mb/d to average 6.18 mb/d. In October, OPEC production according to secondary sources dropped by 256 tb/d to average 31.38 mb/d.

Product Markets and Refining Operations
Despite the peak maintenance season seen in October with more than 8 mb/d of capacity offline worldwide, refinery margins fell across the globe due to high inventories and expectations of a mild winter. Product markets in the Atlantic Basin continued to weaken even with healthy US gasoline demand, pressured by oversupply. Asian margins lost some momentum amid a narrowing of gasoline and gasoil crack spreads which outweighed the
positive performance of naphtha and fuel oil.

Tanker Market
A general improved sentiment was seen in the dirty tanker market, on the back of strong tonnage demand and delays seen in several ports. On average, spot freight rates rose by 19% over the previous month. Clean tanker freight rates declined both East and West of Suez as clean tanker demand was limited. OPEC sailings and fixtures were higher than the month before, while sailings declined in all reported regions, except in European ports.

Stock Movements
OECD commercial oil stocks remained almost unchanged in September to stand at 2,942 mb. At this level, inventories were around 210 mb higher than the latest five-year average, with crude and products indicating surpluses of around 170 mb and 40 mb, respectively. In terms of days of forward cover, OECD commercial stocks stood at 63.0 days in September, around 4.5 days above the five-year average.

Balance of Supply and Demand
Estimated demand for OPEC crude in 2015 remains at 29.6 mb/d, an increase of 0.6 mb/d over the previous year. In 2016, demand for OPEC crude is forecast at 30.8 mb/d, around 1.2 mb/d higher than in the current year and unchanged from the previous report.
Source: OPEC