Oil Market Report - April 2017

Highlights

Demand

• Global Demand Growth: Forecasted at 1.3 million barrels per day (mb/d) for 2017, marking a second consecutive annual decline and slightly below previous forecasts due to weaker-than-expected demand in the first quarter.
• Key Factors: Subdued gains in Russia and India, along with weaker momentum in OECD countries.

Supply

• World Oil Supply: Fell by 755 thousand barrels per day (kb/d) in March, primarily due to reduced production by OPEC and non-OPEC producers, with improved compliance with the output reduction pact.
• Non-OPEC Output: Expected to rise again in 2017, with a growth of 485 kb/d, recovering from a decline of 790 kb/d in the previous year.

OPEC

• Crude Output: Fell by 365 kb/d in March to 31.68 million barrels per day (mb/d), driven by losses in Nigeria, Libya (exempt from supply cuts), and Saudi Arabia.
• OPEC Output in Q1 2017: Was 240 kb/d below the "call" on its crude, implying that global stocks may continue to draw if OPEC adheres to its supply cut.

Stocks

• OECD Industry Stocks: Drew moderately in February and are forecast to fall further in March. Despite a large build-up in January, OECD stocks gained approximately 38.5 million barrels (425 kb/d) in the first quarter.
• Offshore or Smaller Facilities: Drew by an estimated 325 kb/d during the same period.

Prices

• Crude Prices: Fell by more than $3 per barrel ($/bbl) on average in March but rose by $5/bbl in early April.
• Futures Markets: Money managers cut their net long positions by 200 million barrels (mb) amid the price fall.
• Product Prices: Showed few signs of rallying during the refinery maintenance season.

Refineries

• Refinery Throughput: Grew by 1.15 mb/d year-over-year (y-o-y) in the second quarter of 2017.
• Refinery Crude Demand: Surged by 3.5 mb/d between March and July, with most of the increase coming from Atlantic Basin refiners and the Middle East.

Summary

The report highlights a forecasted global demand growth of 1.3 mb/d for 2017, down from previous expectations due to weaker-than-expected demand in the first quarter. World oil supply fell by 755 kb/d in March, mainly due to reduced production by OPEC and non-OPEC producers. OPEC's crude output fell by 365 kb/d in March, with significant losses in Nigeria, Libya, and Saudi Arabia. OECD industry stocks drew moderately in February and are forecast to fall further in March, while non-OECD stocks showed mixed trends. Crude prices fell by over $3/bbl in March but rose by $5/bbl in early April. Refinery throughput is expected to grow by 1.15 mb/d y-o-y in the second quarter, with significant increases in crude demand from various regions.