A new February oil report today from the International Energy Agency (IEA) reveals that global demand growth for oil is forecast to decline considerably in 2016, pushed back by weaker demand in China, Europe, and the United States.
IEA’s oil market report for February add pressure on the bullish calls for oil with crude oil prices now just slightly above 13 year lows.
“Having peaked, at a five-year high of 1.6 million barrels per day (mb/d) in 2015, global oil demand growth is forecast to ease back considerably in 2016, to 1.2 mb/d, pulled down by notable slowdowns in Europe, China and the United States” the IEA reports.
In January global oil supply dropped 0.2 mb/d to 96.5 mb/d with higher OPEC output only slightly offsetting lower non-OPEC production.
In 2016 non-OPEC output is expected to decline by 0.6 mb/d, to 57.1 mb/d.
Now that sanction-free Iranian oil returned back online in global markets, OPEC crude oil output rose by 280 000 barrels per day in January to 32.63 mb/d which is nearly 1.7 mb/d higher compared to the same period a year ago.
Although global throughputs stood more than 1.7 mb/d above the same period a year ago, with strong gains in the Middle East and United States, global refinery runs fell by 1.3 mb/d in January to 79.8 mb/d, as the onset of seasonal maintenance in the United States and weakening refinery margins curbed runs, the IEA reported today.
GDP growth in China is expected to drop to 6.5 percent in 2016, according to Factset’s latest estimate. In the 19 member euro-area, GDP growth is projected to be 1.7 percent and 2.5 percent in the United States for 2016.