- Our forecast for global oil demand growth for 2018 is unchanged from last month’s report at 1.5 mb/d. OECD demand in 1Q18 was revised up by 315 kb/d, partly due to cold weather in the US and the start-up of a petrochemical project. There are offsetting reductions to growth in 2Q and 3Q.
- Non-OECD demand in 1Q18, by contrast, has been revised down by 260 kb/d due to weak Chinese data. India’s early 2018 growth is strong at 380 kb/d y-o-y in the first two months.
- Global oil supply eased by 120 kb/d in March, to 97.8 mb/d, after OPEC and non-OPEC producers deepened their cuts to 2.4 mb/d. Output was nevertheless 1.4 mb/d higher than a year ago mainly due to higher US production. Non-OPEC supply is set to grow by 1.8 mb/d in 2018.
- OPEC crude production fell by 200 kb/d in March, to 31.83 mb/d, on further declines in Venezuela and lower output in Africa. Compliance with the output deal reached 163%. The call on OPEC crude and stocks will hover around 32.5 mb/d for the rest of this year.
- OECD commercial stocks declined by 26 mb to 2 841 mb and were just 30 mb above the five-year average at end February. The average could be reached by May, on the assumption of tight balances in 2Q18. Product stocks are already in deficit.
- ICE Brent futures averaged $66.72/bbl in March and in recent days have risen above $70/bbl to levels not seen since December 2014. Tension in the Middle East is a key factor alongside tighter compliance with the OPEC/non OPEC output deal.
- After 1Q18’s peak refinery maintenance in Europe and the US, global throughput will see a seasonal ramp-up in 2Q18. From March to July, runs will increase by 3.1 mb/d, but supply of refined products will lag behind demand growth.
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