OPEC Monthly Oil Market Report

Oil market highlights

Crude Oil Price Movements

The OPEC Reference Basket averaged $37.86/b in April, a gain of $3.21 or 9.3%. This

was 40% higher than the lows reached in the beginning of the year, buoyed by

expectations for an improving market situation, despite the current persistent oversupply.

Oil futures surged more than 8%, with ICE Brent up $3.55 to average $43.34/b, while

Nymex WTI rose $3.16 to $41.12/b.

World Economy

World economic growth is forecast at 3.1% in 2016, after estimated growth of 2.9% last

year, both unchanged from the previous month. OECD growth in 2016 remains at 1.9%,

slightly below the 2.0% seen in 2015. In the emerging economies, India and China

continue to expand this year at a considerable level of 7.5% and 6.5%, respectively, with

China having been revised up by 0.2 pp after a better-than-expected 1Q16. Brazil and

Russia, however, are forecast to remain in recession this year, contracting by 3.4% and

1.1% respectively, with Brazil having been revised down by 0.5 pp.

World Oil Demand

World oil demand in 2015 grew by around 1.54 mb/d, unchanged from last month’s report.

Total oil consumption averaged 92.98 mb/d. In 2016, world oil demand is projected to rise

by 1.20 mb/d to reach 94.18 mb/d, unchanged from last month’s projections, despite

upward revisions to Other Asia, which were counterbalanced by downward revisions to

Latin America and China.

World Oil Supply

Non-OPEC oil supply growth for 2015 has been revised up slightly to 1.47 mb/d for an

average of 57.14 mb/d. For 2016, non-OPEC oil supply was adjusted lower to average

56.40 mb/d, contracting by 0.74 mb/d. The estimate for OPEC NGLs and non-conventional

oils in 2015 has been revised down by 20 tb/d based on direct communication to show a

rise of 0.13 mb/d to average 6.13 mb/d. Growth in 2016 has also been adjusted lower to

0.16 mb/d to average 6.29 mb/d. In April, OPEC crude oil production rose 188 tb/d to

average 32.44 mb/d, according to secondary sources.

Product Markets and Refining Operations

Product markets in the US were supported by strong domestic gasoline demand amid

tightening sentiment due to some outages and maintenance. In Europe, higher export

opportunities for gasoline ahead of the driving season lent support to refinery margins.

Meanwhile, Asian margins weakened despite peaking refinery maintenance in the region

as the oversupply in middle distillates weighed on product markets.

Tanker Market

Dirty tanker spot freight rates declined on the back of lower VLCC and Aframax freight

rates as tonnage availability grew while market activity remains limited. Suezmax spot

freight rates improved in April supported by strong sentiment for several destinations

combined with an occasionally tight position list. In the clean tanker market, West of Suez

activities supported freight rates, while East of Suez rates remained weak.

Stock Movements

OECD commercial oil stocks fell in March to stand at 3,049 mb. At this level, OECD

commercial oil stocks are around 361 mb above the latest five-year average. Crude

inventories showed a lower surplus of 215 mb, while products were broadly flat at 146 mb.

In terms of forward cover, OECD commercial stocks stood at 66.8 days, some 7.5 days

higher than the latest five-year average.

Balance of Supply and Demand

Demand for OPEC crude in 2015 is estimated to average 29.7 mb/d, unchanged from the

previous month and 0.1 mb/d lower than the previous year. In 2016, demand for OPEC

crude is projected at 31.5 mb/d, unchanged from the previous report and 1.8 mb/d higher

than last year

 

Source: OPEC

 

Click here for more market articles you need to read..

Forex Trading Workshops – LONDON

Forex Trading Workshops – BRISTOL

 

Charles Clifton Forex Trader 02

 

Charles Clifton : Forex Trader // Coach // Signals // Seminars

E: info@charlesclifton.co.uk
w: www.charlesclifton.co.uk
M: 07871 515203
T: 0117 3 789 969