IEA: Supplies Remained Abundant Despite Ongoing Fall of Prices

The following are the highlights of IEA’s February 2015 Oil Μarket Report released today:

· Oil prices rebounded from near six‐year lows touched in January as market participants took stock of declines in US rig counts and relatively positive US economic data. At the time of writing, ICE Brent was trading at $58.25/bbl – roughly 50% below its June 2014 peak. NYMEX WTI was at $52.55/bbl.
· Global supplies fell by 235 kb/d in January to 94.1 mb/d on lower OPEC and non‐OPEC production. Reductions in capital expenditures have cut projected 2015 non‐OPEC supply growth to 800 kb/d. US 2015 production is seen 200 kb/d lower than in last month’s Report, at an average 12.4 mb/d, with most of the cuts in 2H15.
· OPEC crude oil output fell by 240 kb/d in January to 30.31 mb/d, led by losses from Iraq and Libya. Output from Saudi Arabia, Kuwait, Angola and Nigeria edged up. Downward revisions to the non‐OPEC supply growth forecast for 2H15 have raised the ‘call’ on OPEC to an average 30.2 mb/d – just above the group’s official target of 30 mb/d.
· The forecast of global oil demand growth for 2015 is unchanged from last month’s Report, at 0.9 mb/d, bringing average demand for the year to 93.4 mb/d. Growth is expected to gain momentum from a modest 0.6 mb/d gain in 2014, on a slightly improved macroeconomic outlook.
· OECD industry stocks slipped by 5.3 mb in December, roughly one tenth of the five‐year average draw for the month. Consequently, inventories’ surplus to average levels ballooned to 65 mb from 16 mb in November, its widest since October 2010. Preliminary data point to a seasonal 22.7 mb stock build in January.
· Global refinery crude throughputs rose by 1.1 mb/d in December, to 79.1 mb/d, before maintenance curbed activity in January. An unexpected dip in Saudi Arabian runs in November underpins a 140 kb/d downward revision to last month’s assessment of 4Q14 runs, to 78.1 mb/d. Throughputs are projected to fall to 77.6 mb/d in 1Q15.