The International Energy Association (IEA) has forecasted that global oil demand will ease back considerably in 2016 to 1.2 million barrels per day having peaked at a five-year high of 1.6 million barrels per day in 2015 pulled down by notable slowdowns in Europe, China and the United States.
In its Oil Market Report released on February 9, it observed that higher OPEC outputs only partly offsets non-OPEC output. The report stated that non-OPEC supplies slipped 0.5 million barrels per day from a month earlier to stand close to levels of a year ago. For 2016 as a whole, non-OPEC output is expected to decline by 0.6 million barrels per day to 57.1 million barrels per day.
The report also noted that OPEC countries pumped about 280,000 barrels per day more in January accounting for output of 32.63 million barrels per day. This is fueled largely by supplies from Saudi Arabia, Iraq and Iran recently emerging from sanctions. Supplies from the group during January stood nearly 1.7 million barrels per day higher year-on-year.
The report also examined global refinery runs and noted that it fell by 1.3 million barrels per day in January to 79.8 million barrels by per day. This was occasioned by the onset of seasonal maintenance of refineries in the United States and his weakening refinery margins curbed production runs. It put global throughputs at 1.7 million barrels per day above a year earlier comparison and attributed the gains primarily to United States and the Middle East.
In its January report, the IEA reported that global oil demand flipped from a near five-year high in the third quarter of last year, at 2.1 million barrels per day, to a one-year low in the fourth quarter of 1 million barrels per day, due to exceptionally mild temperatures in early part of the winter in Japan, Europe and the United States coupled with weak economic sentiment in China, Russia and other commodity-dependent economies.
It said that that global oil supplies expanded by 2.6 million barrels per day last year, following hefty gains of 2.4 million barrels per day in 2014. By last December, however, growth had eased to 600,000 barrels per day with lower non-OPEC production that pegged below year-earlier levels for the first time since September 2012.
While OECD countries continue to build inventory in January, Nigeria has seen a reduction of its refining capacity in January due to frequent oil pipelines vandalisation by suspected militants.
– ISAAC ANYAOGU
