Global Oil Demand Growth Slumping

The IEA Oil Market Report (OMR) for September trimmed global oil demand growth for 2014 and 2015 to 0.9 million barrels per day (mb/d) and 1.2 mb/d, respectively, because of a pronounced slowdown in demand growth in the second quarter of this year, and a weaker outlook for Europe and China.

Demand in 2015 is now set at 93.8 mb/d, the monthly report informed subscribers.

Global supply declined 400 000 barrels per day (400 kb/d) in August, to 92.9 mb/d, as non‐OPEC production eased. Also, non-OPEC production fell by 130 kb/d in August to 30.31 mb/d as a steady recovery in Libya failed to offset lower supply from Saudi Arabia and Iraq, the report states.

IEA says that compared with August 2013, global supply rose 810 kb/d as a 1.2 mb/d rise in non‐OPEC output more than offset a 370 kb/d year-on-year drop for OPEC. Non‐OPEC supply is set to expand by 1.6 mb/d in 2014, and 1.3 mb/d in 2015, to reach 57.6 mb/d.

The weaker demand outlook as well as robust non-OPEC supply growth led the OMR to trim its “call on OPEC crude and stock change” by 200 kb/d for the fourth quarter of this year to 30.6 mb/d and 300 kb/d for 2015 to 29.6 mb/d.

OECD industry inventories built seasonally by 15.5 mb in July, to 2 670 mb, on soaring US stocks of “other products”.

Preliminary data collected by the IEA indicate that stocks continued their upward trajectory in August, rising by 19.5 mb, further cutting the deficit to the five‐year average, which stood at 57 mb/d at end‐July.