[IEA]：Oil Market Report - October 2018

Twin Peaks

Both global oil demand and supply are now close to new, historically significant peaks at 100 million barrels per day (mb/d). Neither shows signs of ceasing to grow anytime soon. Fifteen years ago, forecasts of peak supply were prevalent, with non-OPEC production expected to start declining by now. However, production has surged, primarily due to the U.S. shale revolution, along with significant increases in Brazil, Canada, and other countries.

Potential supply could come to the market from places like Iran, Iraq, Libya, Nigeria, and Venezuela, if their various challenges can be overcome. There is no peak in sight for demand either, driven by powerful factors such as rising living standards, particularly in developing countries, which are already underpinning strong demand growth for plastics and will continue for many years to come.

Demand

Summary

Global Demand Growth: Forecast for demand growth in 2018 and 2019 has been reduced by 110 kb/d to 1.3 mb/d and 1.4 mb/d, respectively.
OECD Demand: Expected to expand by 300 kb/d in 2018, slowing to 130 kb/d in 2019.
Non-OECD Demand: Will grow by 1 mb/d in 2018, led by China and India, accounting for 60% of the global increase.

Fundamentals

OECD Demand: Supported by a strong first quarter of 2018 and robust U.S. growth.
Non-OECD Demand: Primarily driven by China and India, with strong growth in refining capacity.

Supply

OPEC Crude Oil Supply

September Production: OPEC crude oil production rose by 100 kb/d in September to a one-year high of 32.78 mb/d.
Growth: Since May, OPEC output has increased by 735 kb/d, led by the main Gulf producers and supported by Nigeria and Libya, offsetting falls in Iran and Venezuela.

Non-OECD Overview

Forecast: Non-OPEC output is forecast to expand by 2.2 mb/d in 2018 and 1.8 mb/d in 2019, with the United States leading the growth.

Refining

Summary

Capacity Additions: Refiners are facing increased competition as capacity additions surge between now and end-2019.
Throughput: Refinery runs will grow by 1.3 mb/d in 2019, while refined product demand growth is only 1 mb/d.

Margins

Market Competition: Refineries are experiencing increased competition, with capacity additions surging.

Stocks

Summary

OECD Commercial Stocks: Rose by 15.7 mb in August to 2,854 mb, their highest level since February, due to strong refinery output and LPG restocking.
Quarterly Increase: OECD inventories are likely to have risen by 43 mb (470 kb/d) in Q3 2018, the largest quarterly increase in stocks since Q1 2016.

Prices

Market Overview

Brent Prices: Reached four-year highs above $85/bbl in early October.
Differential: The Brent-WTI differential widened to $9/bbl as U.S. price increases were weaker.
Product Prices: Failed to match the gains made by crude.