The IEA’s global demand growth forecast for 2015 has also remained flat with the prior estimate of 1.1 million barrels a day. Total daily global demand is now forecast at 93.6 million barrels a day.
Supply is outstripping demand by 2.1 million barrels a day. Global supply growth remained at 3.2 million barrels a day in April.
According to the IEA, OPEC produced 31.21 million barrels a day in April, the highest total since September 2012. The IEA has revised its projected supply growth for non-OPEC countries from 810,000 barrels a day in 2015 to a new total of 830,000 barrels a day. The “call on OPEC” supplies has been lowered by 300,000 barrels a day for the second half of the year to 30 million barrels a day.
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When OPEC released its own Monthly Oil Market Report for April on Tuesday, the cartel estimated world demand in 2015 to reach 92.5 million barrels a day. OPEC’s current supply forecast calls for non-OPEC supply to total 57.16 million barrels a day in 2015.
Global refinery runs are expected to dip slightly in the second quarter, from 78.2 million barrels a day in the first quarter to 77.8 million barrels a day.
From the IEA’s report:
Russian production jumped by a steep 185 kb/d year-on-year in April. For all its troubles, Brazil’s Petrobras is also a supply success story of sorts. … Brazil output was up 17% year-on-year in the first quarter. Chinese production is also growing at a healthy clip, as is output from Viet Nam and Malaysia. Meanwhile, last month’s vigorous WTI price rebound is giving [U.S. light tight oil (LTO)] producers a new lease on life. Several large LTO producers have been boasting of achieving large reductions in production costs in recent weeks. At the same time, producer hedging has reportedly gone steeply up, as companies took advantage of the rally to lock in profits.
The IEA also notes that it is “premature to suggest that OPEC has won the battle for market share” that the cartel started in November 2014.
West Texas Intermediate (WTI) for June delivery traded up about 0.8% on the NYMEX Wednesday morning at $61.24 after closing at $60.75 on Tuesday. Brent traded at $67.23 on the ICE, having closed at $66.86 Tuesday.
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