Oil Market Report - 2003 Archives

HIGHLIGHTS

• Crippling Strike in Venezuela: A strike in December 2002 resulted in an estimated loss of 80 million barrels (mb) of crude and product supply.
• OPEC Production: OPEC agreed to boost production targets by 1.5 million barrels per day (mb/d) to 24.5 mb/d starting from February 1, 2003.
• World Oil Production: World oil production fell by 2.06 mb/d in December 2002, to 76.43 mb/d. Total OPEC crude output declined by 1.73 mb/d, primarily due to a 1.95 mb/d drop in Venezuela, offset by increases from other producers. Non-OPEC output rose by 182 thousand barrels per day (kb/d).
• OECD Industry Oil Stocks: OECD industry oil stocks fell by 1.17 mb/d in November 2002, to 2540 mb, which is 107 mb below year-earlier levels. Crude stocks decreased by 27 mb over the month. US crude stocks were barely above minimum operational levels in mid-January 2003, at 272 mb.
• Supply Conditions: Tight supply conditions dominated world oil markets in December, leading to sharp increases in cash crude prices. WTI averaged $29.45, Dated Brent $28.67, and Dubai $25.73.
• Global Oil Demand: Despite the slow pace of economic recovery, global oil demand grew faster than expected in late 2002, driven by cold weather, low Japanese nuclear power output, and robust gains in Chinese apparent demand. The estimate of demand growth has been raised by 60 kb/d for 2002, to 390 kb/d. The growth forecast for 2003 remains at 1.04 mb/d.

DEMAND

• OECD: Early indications of current demand show growth.
• North America: Demand remained steady.
• Pacific: Demand increased slightly.
• Europe: Demand showed signs of improvement.
• Non-OECD: Growth was particularly strong in China and other non-OECD regions.

SUPPLY

• OPEC: Proposed January cuts were overturned.
• North America: No significant changes in supply.
• North Sea: Production remained stable.
• Former Soviet Union (FSU): Supply saw slight increases.
• Other Non-OECD: Production increased in Mexico, Alaska, and Brazil.

PRICES AND REFINERY ACTIVITY

• Crude Oil Prices: Cash crude prices rose sharply, with WTI averaging $29.45, Dated Brent $28.67, and Dubai $25.73.
• Refining Margins: Product prices lagged behind crude gains, squeezing refining margins and putting downward pressure on throughputs.

FOCUS ON VENEZUELA

• Current Situation: A strike in December significantly reduced supply.
• Market Prospects: Market conditions are expected to improve as supply disruptions ease.

TRADE

• OECD Trade: Trade volumes remained stable.
• Freight: Freight rates increased slightly.
• Non-OECD Trade: Trade volumes increased in non-OECD regions.

OECD STOCKS

• Summary: OECD industry oil stocks fell by 1.17 mb/d in November 2002.
• OECD Industry Stock Changes: Detailed changes in November 2002.
• OECD Regional Stock Developments: North America, Europe, and Pacific regional developments.

PRICES AND REFINERY ACTIVITY

• Crude Oil Prices: Summary of spot crude prices and differentials in December.