According to the latest June report prepared by the IEA – International Energy Agency on the recent changes in global crude oil market as of April/May 2012, the global Oil Supplies rose again in May; the non-OPEC supply also rose during last month. OECD oil inventories expanded during April. Lastly, the global refinery crude demand is set to rise in the upcoming season.
According to the recent monthly update, during May, OPEC’s oil production edged down to 31.87 million bbl/d a decrease of only 20 kb/d. This means the production hasn’t changed much during last month despite the decline in Saudi Arabia and Iraq’s output, which was offset by the rise in Angola, Nigeria and Libya’s oil production.
The non-OPEC countries’ oil production edged up by 0.2 mb/d during May 2012. According to the report, the increase was mostly due to the rise in North America’s supply.
The global oil demand projection is expected to rise by 0.82 mbbl/d to 89.9 mbbl/d in 2012 compared with 2011’s demand.
In the report, the OECD industry oil inventories increased by 17.3 million bbl to 2,643 million bbl in April 2012. The oil stockpiles are slightly below the 5-year average; this means that the oil market is keep loosening up in OECD countries, mainly in Europe; this was probably among the reasons for the decline in premium of Brent oil over WTI in recent weeks.
Finally, global refinery crude demand is expected to surge by 2.8 million barrels per day between April and August. This is due to the completion of maintenance repairs in Asia and Europe. There is also a seasonality effect that is likely to keep the refinery crude demand high in the months to follow.
This report is encouraging as it means the global oil market is loosening up with an increase in total production (mainly from non-OPEC countries), no change in expected demand and OECD oil inventories and crude refinery demand on the rise.
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