WTI futures hit 16-month highs in July, narrowing the gap with Brent, amid surging US refining runs and crude draws. The benchmark gained $8.90/bbl m-o-m, to $104.70/bbl. Brent rose $4.09/bbl to $107.43/bbl, a four-month high, on supply outages in Libya and Iraq. WTI was last trading around $103.50/bbl and Brent at $106.70/bbl.
Global oil demand growth is expected to accelerate in 2014 to 1.1 mb/d, compared with 0.9 mb/d in 2013. The forecast of demand growth for 2014 has been trimmed by 0.1 mb/d on reduced GDP expectations from the IMF, while that for 2013 is largely unchanged.
Global supply is estimated to have increased by 575 kb/d m-o-m in July, to 91.85 mb/d, led by higher non-OPEC production. Strong growth in North America is expected to lift 2H13 total non-OPEC supply by an average 1.4 mb/d y-o-y, to reach 55.4 mb/d in 4Q13.
OPEC crude oil supplies edged down by 165 kb/d m-o-m in July, to 30.41 mb/d, on supply disruptions in Libya and Iraq and despite higher Saudi output. The ‘call on OPEC crude and stock change’ for 3Q13 was revised upwards by 200 kb/d, to 30 mb/d, on higher demand projections for the quarter.
Global refinery crude demand surged by 3.1 mb/d in June, its highest monthly increase on record, and likely rose further in July, ahead of autumn maintenance. At 77.2 mb/d, June runs were almost 2.0 mb/d above year-earlier levels. Global runs were pegged at 74.8 mb/d for 2Q13, rising to 77.3 mb/d in 3Q13.
OECD industry inventories built seasonally by 11.9 mb in June, to 2 663 mb. Steep gains of 33.6 mb in product inventories led the increase, offsetting large crude draws. Refined product stocks covered 30.5 days of forward demand at end-June, up 0.8 day on the month.
Source: IEA