- Our demand growth estimate for 2018 has been left largely unchanged, at 1.4 mb/d. Recent data confirms strong growth in 1Q18 and in early 2Q18, partly due to colder weather in the northern hemisphere. A slowdown is expected in 2H18.
- For 2019, our first estimate of demand anticipates growth of 1.4 mb/d. A solid economic background and an assumption of more stable prices are key factors. Risks include possibly higher prices and trade disruptions. Some governments are considering measures to ease price pressures on consumers.
- Global oil supply rose 276 kb/d in May, to 98.7 mb/d, as non-OPEC output rose further to stand a hefty 2.2 mb/d above a year ago. OPEC production crept higher. Non-OPEC supply will grow by 2.0 mb/d in 2018, easing slightly to 1.7 mb/d.
- OPEC crude supply edged up 50 kb/d in May to 31.69 mb/d. Higher flows from Saudi Arabia, Iraq and Algeria offset a fall in Nigeria and further declines in Venezuela. While the call on OPEC is set to ease in 2019, potential losses from Venezuela and Iran could require others to produce more.
- OECD commercial stocks declined 3.1 mb in April to a new three-year low of 2 809 mb. Middle distillate holdings fell 7.4 mb in April and were significantly below the five-year average in the Americas and Europe ahead of the peak demand season in the northern hemisphere.
- Outright benchmark crude prices reached multi-year highs in late May but have since fallen back awaiting the outcome of the OPEC meeting. ICE Brent and NYMEX WTI futures prices are up 14% and 9%, respectively, this year.
- Estimated 2Q18 refinery runs are revised down to 80.9 mb/d, but for 3Q18 they are revised higher to 82.5 mb/d. Refined products stocks should build in 3Q18 by 0.4 mb/d after drawing by 1.2 mb/d in 2Q18. Despite Brent prices briefly touching $80/bbl, margins were generally higher m-o-m.
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