• Supported by strong 4Q16 numbers,the estimate for global oil demand growth for 2016 was revised up for the third consecutive month to 1.6 mb/d. Although still forecast to decelerate in 2017 to 1.4 mb/d, recent improvements in industrial activity are providing support.
  • Global oil supplies plunged nearly 1.5 mb/d in January, with both OPEC and non-OPEC countries producing less. At 96.4 mb/d, world oil production stood 730 kb/d below a year ago, with OPEC posting its first year-on-year (y-o-y) decline since early 2015.
  • OPEC crude production fell by 1 mb/d to 32.06 mb/d in January, leading to record initial compliance of 90% with the output agreement. Some producers, including Saudi Arabia, cut supply by more than required. Lower production was partly offset by higher flows from Libya and Nigeria, which are exempt from cuts.
  • After falling by 0.8 mb/d last year, non-OPEC output will grow by 0.4 mb/d in 2017.Growth is mainly in the Americas, where higher prices are fuelling increased investments in US LTO activity and long lead-time projects are coming on stream in Brazil and Canada.
  • OECD total oil stocks fell nearly 800 kb/d in 4Q16, the largest fall in three years.End-December inventories were below 3 000 mb for the first time since December 2015. Stocks continued to build in China and other emerging economies and volumes of oil at sea also increased.
  • Front-month Brent futures gained by a modest $0.59/bbl to $55.51/bbl in January as traders awaited news of OPEC cuts. The Brent contango narrowed, while sour benchmark Dubai continued to rise versus Brent and WTI. Gasoline, LPG and naphtha cracks increased.
  • 4Q16 refinery runs were stronger on more solid product demand, with runs up 830 kb/d y-o-y, after modest growth of 160 kb/d in 3Q16. This brought 2016 average throughput growth to 465 kb/d. 1Q17 refinery runs are forecast to grow 200 kb/d y-o-y.
Posted in: IEA