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Trying to get a grip on actual oil demand

Trying to get a grip on actual oil demand thumbnail

The current quarter will be key in shaping the oil supply-demand balances for 2019, according to the latest outlooks from the world’s three major oil-forecasting agencies. If the big inventory draws they expect fail to materialise, Opec’s goal of pulling down excess stockpiles will be delayed again.

The International Energy Agency, the US Energy Information Administration and the Organisation of Petroleum Exporting Countries all see the biggest oil inventory draws for the year happening now, during the period of peak demand and before non-Opec supply surges seasonally, as the summer maintenance season at fields in the Northern Hemisphere comes to an end.

There are big differences between the ways the three agencies see the global oil supply/demand balance evolving this year. Opec is much more bullish than either of the others about the size of the stockdraw. The group now sees global stockpiles falling at an average rate of 780,000 barrels a day in 2019, driven by a draw of more than 2 million barrels a day in the third quarter.

The EIA sees inventories coming down by a much more modest 100,000 barrels a day, while the IEA sees a tiny build over the course of the whole year.

Why these projections differ

Assessments of non-Opec supply growth explain part of the difference. While all three agree that non-Opec oil production will grow, Opec is alone in seeing that growth heavily weighted to the fourth quarter, with IEA and EIA both seeing much steadier growth over the course of the year. Some of the differences are hard to reconcile, as assessments of oil production in the first quarter of the year should be pretty reliable by now.

Things are about to get a lot more difficult for Opec. While non-Opec oil supply is set to increase by more than 1.7 million barrels a day between the third and fourth quarters, demand will rise by a much more modest 220,000 barrels a day. Inventories need to be falling fast now if we are to avoid a huge build towards the end of the year.

It is not only on the supply side of the balance where differences are apparent, though. Although all three agencies now see global oil demand increasing by a little more than 1 million barrels a day this year, the routes they have taken to arrive at their current estimates are very different.

Opec, which began the year as the most pessimistic of the three on global oil demand growth, is now the most optimistic. That could be evidence that the group’s analysts had a better read on the situation well ahead of their counterparts in the oil-consuming countries. But there are some worrying details in the quarterly assessments that suggest the Opec forecast may have further to fall.

While both the IEA and the EIA have slashed their demand growth figures for the first and second quarters, Opec’s have hardly moved. The IEA and EIA have also started to cut their estimates for oil demand growth in the current quarter, leaving Opec alone in maintaining its estimate at 1.24 million barrels a day.

If Opec is forced to follow suit and start cutting its own estimates of third-quarter demand, that big stock draw that it sees helping to drain excess inventories this year will begin to erode.

Opec production is already down year on year by more than 2 million barrels a day. All of that can be accounted for by the involuntary cuts that have been forced on Iran and Venezuela. Saudi Arabia’s voluntary output cut of 665,000 barrels a day between July 2018 and July 2019 has been entirely offset by higher production from Libya, Iraq and Nigeria.

Opec members will be hoping that their analysts have gotten it right and that they have done enough to drain global stockpiles at a rate of 2 million barrels a day this quarter. Ministers from the Opec+ group will be gathering in Abu Dhabi next month to assess the progress of their cooperation. If their analysts are wrong, it could be a gloomy meeting.

gulfnews



34 Comments on "Trying to get a grip on actual oil demand"

  1. Dredd on Fri, 23rd Aug 2019 4:30 am 

    There is too much oil demand.

  2. Robert Inget on Fri, 23rd Aug 2019 7:27 am 

    http://www.livecharts.co.uk/MarketCharts/crude.php

    Above, a moving display of our economy in a nutshell.

    Imagine if you will, the mindset of the following;
    Donald Trump as a CEO of any large company.
    Donald Trump as YOUR lawyer.
    Donald Trump as YOUR doctor.
    Donald Trump as your airline pilot.
    Donald Trump as your financial advisor.
    Donald Trump as your husband or father.
    Donald Trump as head of anything except a family
    crime business.

  3. Davy on Fri, 23rd Aug 2019 7:45 am 

    Bobbie, what will you do when trump is gone. You will have nothing to discuss. You remind me of Plantagenet and his Obama obsession. Get a life old man. At least you are not a troll like JuanP

  4. Robert Inget on Fri, 23rd Aug 2019 8:13 am 

    First of all I’ve outlived David Koch. Ha.
    Progress is made one funeral at a time.
    Second:
    Feminize my name if you will, I’m flattered.
    I’ve been a feminist long before it was a ‘thing’.
    Third:
    This morning’s Trump rant is more about WHEN Trump leaves for a white collar Federal Prison or escapes to Moscow.
    (See news on Trump’s War on Trade tariffs)

    I don’t believe Trump can run a bake sale.

    1) He, Trump, destroyed the Republican Party.
    (This moves Democrats too far Left)
    All the R Senators currently defending his insanity
    will dump him like a hot turd once he leaves office. But.. Too Late. All their complimentary
    language over Trump today, goes to their graves.
    One funeral at a time.

    Oh, if you bothered to open that link you will see
    another reason for my preoccupation.

  5. Robert Inget on Fri, 23rd Aug 2019 8:15 am 

    China hits back at the Trump administration with tariffs on $75 billion worth of US products.

    Gina Heeb

    Aug. 23, 2019, 08:48 AM
    Damir Sagolj/Reuters
    China on Friday announced plans to retaliate against the Trump administration with new tariffs on roughly $75 billion worth of US products including cars.
    The tariffs would take effect in two separate batches, on September 1 and December 15.
    President Donald Trump said this month he would slap tariffs on all remaining imports from China on those dates.
    Visit Markets Insider for more stories.

  6. Robert Inget on Fri, 23rd Aug 2019 8:19 am 

    I’ll bet VW reconsiders buying Tesla.

    “Trade wars are easy to win” D. Trump.

  7. More mindless juanpee trolling on Fri, 23rd Aug 2019 9:06 am 

    Davy on Fri, 23rd Aug 2019 7:45 am

  8. pointer on Fri, 23rd Aug 2019 10:42 am 

    In other news, Hell welcomes David Koch.

  9. Robert Inget on Fri, 23rd Aug 2019 10:50 am 

    A lower USD will help exports.
    In particular US shale “crude”.

    http://www.livecharts.co.uk/ForexCharts/dollarindex.php

    IMO, we have entered into a race to the bottom
    AKA Currency Trade War.

  10. dave thompson on Fri, 23rd Aug 2019 11:44 am 

    Ya gotta love the term “demand” such as I “demand” clean water, safe food, a healthy biosphere. That is always linked to some rich cocksucker getting wealthy at the expense of human “demand”. Needs of sustenance are not “demand”, economic terms are completely fucked up.

  11. Robert Inget on Fri, 23rd Aug 2019 4:17 pm 

    Here’s what I’m taking about;

    Overstock CEO resigns after ‘Deep State’ comments roil stock
    Associated Press Associated Press Thu, Aug 22 1:47 PM PDT

    Reactions Reblog on Tumblr Share Tweet Email
    SAN FRANCISCO (AP) — The CEO of Overstock.com has resigned, saying he’d become “far too controversial” to helm the e-commerce company known for selling discounted sofas and jewelry.

    Patrick Byrne’s resignation Thursday came after the company issued a bizarre statement last week in which the former CEO referred to the “Deep State,” called federal agents “Men in Black” and confirmed a journalist’s stories detailing his relationship with Maria Butina, a gun-rights activist who was sentenced to prison for being an unregistered agent of Russia.

    Overstock.com’s shares fell 36% in the two days after the statement was made public” (30)

    This dude just mentioned “the Deep State” and became radio active.

    D. Trump just named the head of the Fed Reserve
    a bugger enemy then CHINA.

    Trump talks trash all morning. So much BS it’s hard to pick out what’s true and what’s a lie.
    (every-word Trump says is a lie, including ‘and’ ‘be’,’the’, ‘of’, ‘a’) {just trying to help}

  12. Robert Inget on Fri, 23rd Aug 2019 5:01 pm 

    Revenge porn, Just in;

    The Trump administration said Friday it would retaliate against China’s latest tariffs with a tariff increase of its own.

    The president tweeted that tariffs on the $250 billion of imports already in place will be raised to 30% from 25% on Oct. 1.

    Trump also said the remaining $300 billion of imports set to go into effect on Sept. 1 will be taxed at 15%, rather than 10%.

    That added to a rapid series of trade escalations between the world’s largest economies.
    Hours earlier, China announced it would levy new tariffs on thousands of American products.

    Visit Markets Insider for more stories.

    https://markets.businessinsider.com/news/stocks/trump-trade-war-us-announces-tariff-hike-retaliation-against-china-2019-8-1028470574?utm_campaign=browser_notification&utm_source=desktop

    It took Trump all day to come up with this brilliant
    plan.

    My thinking. This ignoramus is crazy like a fox.
    If Trump gets away with USD currency devaluation
    he truly believes he will look like a genius.
    In point of fact, he just raised taxes on the American People.

    China will devalue the yuan. China markets products elsewhere; Africa, Asia, Europe, India,
    Russia.

    China holds almost ALL the cards when it comes US Treasury Bonds. Flood markets with USD denominated bonds and we (Americans) won’t be
    able to finance Social Security, defense, Medicare, most of all, DEBT SERVICING.
    IOW’s the USA will default so buying Greenland or Nassau might be tough going.

    This doesn’t need to happen. Congress can come back to Washington, do their job, impeach the Nut-Job. In a week, with a somewhat more sane
    President Pence and a group of expert, true Conservatives, maybe… the Republic can be saved. Remember, China and Russia are looking to destroy the US democracy they believe is standing in the way of China and Russia becoming super-powers.

    As of this minute no such plan is on offer.

    There is too much at stake to permit D. T. on orders from Putin, to bring down this economy.

  13. Sissyfuss on Sat, 24th Aug 2019 8:20 am 

    Not a race to the bottom, Robert. A race for what’s left.

  14. Famlin on Sat, 24th Aug 2019 4:54 pm 

    Mr Koch will go to neither heaven nor hell since these 2 entities dont exist.
    He will go only to earth and be eaten by bacteria and this is true.

    This man never believed in earth and poisoned the planet with the toxic oil sands operation. He even spread the extremist version of protestant christianity just like saudis spread extremist sunni islam.

    He must have felt sad at the slow demise of dieselers in european heartland (VW scandal) and the beginning of the end of gassers.

  15. DerHundistLos on Sat, 24th Aug 2019 8:04 pm 

    I hate to disappoint friend, Famlin, but the Koch brothers inherited a fortune and don’t give a damn about anything but themselves.

  16. DerHundistLos on Sat, 24th Aug 2019 8:07 pm 

    Davy, are you naturally a jerk?

    Thanks for your comments, Robert. Your analysis is spot on.

  17. Duncan Idaho on Sat, 24th Aug 2019 8:48 pm 

    So let’s not confuse real estate bubbles and technology. It’s counter-productive.

    Jevons paradox

    https://en.wikipedia.org/wiki/Jevons_paradox

  18. ElQuardashianalameriki-akafmr on Sat, 24th Aug 2019 10:32 pm 

    der, one thing after another. first thing first, produce evidence of probing.

    then we can sort out your complaint and privolous attack on supertard

    “‘lo i’m a supereior muzzie monkey allah has created the best of humanity and I wear a muzzie dress”

  19. makati1 on Sat, 24th Aug 2019 11:54 pm 

    Robert. would you like to show references, other than USMSM propaganda, to prove your assertion: “There is too much at stake to permit D. T. on orders from Putin, to bring down this economy.”

    Trump was always an uneducated, arrogant bully, and was put in office by the dumbed down, brainwashed, flyover serfs, not Putin. They actually believed his promises, showing that they were/are no smarter than he is. Gullible fools deserve what they get.

    He has blundered from bankruptcy to bankruptcy, saved by the Rothschilds, whom he DOES work for, along with the Jews. They want the US to be leveled economically and financially so the OWG can proceed.

    I know it is difficult to see reality thru the propaganda you in the US are fed 24/7/365, but you have to try or go down with the ship. Thousands of Americans jump ship every year. We have over 220,000 Americans living in the Philippines as I type. More come every day. The police state exit door is closing. Jump now!

  20. Cloggie on Sun, 25th Aug 2019 9:19 am 

    Haha, oil demand is good.

    Yesterday, between Hamburg and Luebeck I drove under those:

    https://youtu.be/zMnpvGD49SM
    (English subs)

    The 2nd German test e-highway. The first is near Frankfurt.

    https://youtu.be/x_v0P0AUl9I

    It works for trains, so it will work for trucks. And no harm done by those “not in my back-yard types”, opposing high-voltage grid lines. Highways already exist and are accepted.

    Payback time compared to diesel-trucking: five years.

    https://www.internationales-verkehrswesen.de/oberleitungs-lkw-im-check/

  21. Cloggie on Sun, 25th Aug 2019 9:22 am 

    Siemens has buillt similar demonstration projects in the US:

    https://www.internationales-verkehrswesen.de/ehighway-system-in-the-u-s/

  22. Robert Inget on Tue, 27th Aug 2019 10:45 am 

    Last week’s EIA Consumption Repore;
    (all you really need yo know about DEMAND)

    Total products supplied over the last four-week period averaged 21.5 million barrels per
    day, up by 3.1% from the same period last year.

    Over the past four weeks, motor gasoline
    product supplied averaged 9.7 million barrels per day, up by 1.5% from the same period
    last year. Distillate fuel product supplied averaged 3.8 million barrels per day over the
    past four weeks, down by 1.6% from the same period last year.

    Jet fuel product supplied was up 4.0% compared with the same four-week period last year.

    A NEW unvarnished repore will appear here
    @ 10:30 Eastern Wednesday.

    Meanwhile, share prices reflecting current oil prices, at depression lows.
    Fact: crude oil prices are almost $100 a barrel lower than eleven years ago.
    Fact: Demand increases at over 1.5% compounded each year.

    While gasoline demand has fallen since 2017, crude oil for jet fuel, diesel made up for shortfall and then some.

  23. Robert Inget on Tue, 27th Aug 2019 4:08 pm 

    Colossal Crude Oil Inventory Draw Carries Prices Higher
    By Julianne Geiger – Aug 27, 2019, 3:46 PM CDT
    The American Petroleum Institute (API) has estimated a staggering crude oil inventory draw of 11.1 million barrels for the week ending Aug 22, compared to analyst expectations of a 2.112-million barrel draw.

    The inventory draw this week adds onto last week’s draw in crude oil inventories of 3.45 million barrels, according to API data. The EIA estimated that week that there was an inventory draw of 2.7 million barrel

  24. Robert Inget on Tue, 27th Aug 2019 4:12 pm 

    Glut/smut

    http://www.livecharts.co.uk/MarketCharts/crude.php

    Back over 55, can $60 be far behind?

    lets see what’s happening w/ CAN dollar;
    http://www.livecharts.co.uk/ForexCharts/usdcad.php

  25. Sissyfuss on Wed, 28th Aug 2019 8:18 am 

    Clogforia, a question. If those electrified trucks hit a slippery patch and end up well beyond the reach of their masts, do they have any battery power allowing them to get back in contact with the wires or do they become a traffic blockade until a tow truck comes along to remarry them with their source of go?

  26. Robert Inget on Wed, 28th Aug 2019 9:32 am 

    Summary of Weekly Petroleum Data for the week ending August 23, 2019

    U.S. crude oil refinery inputs averaged 17.4 million barrels per day during the week
    ending August 23, 2019, which was 295,000 barrels per day less than the previous
    week’s average. Refineries operated at 95.2% of their operable capacity last week.
    Gasoline production increased last week, averaging 10.7 million barrels per day.
    Distillate fuel production decreased last week, averaging 5.2 million barrels per day.

    U.S. crude oil imports averaged 5.9 million barrels per day last week, down by 1,290,000
    barrels per day from the previous week. Over the past four weeks, crude oil imports
    averaged about 7.0 million barrels per day, 12.3% less than the same four-week period
    last year. Total motor gasoline imports (including both finished gasoline and gasoline
    blending components) last week averaged 965,000 barrels per day, and distillate fuel
    imports averaged 125,000 barrels per day.
    U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum
    Reserve) decreased by 10.0 million barrels from the previous week. At 427.8 million
    barrels, U.S. crude oil inventories are at the five year average for this time of year. Total
    motor gasoline inventories decreased by 2.1 million barrels last week and are about 3%
    above the five year average for this time of year. Finished gasoline inventories increased
    while blending components inventories decreased last week. Distillate fuel inventories
    decreased by 2.1 million barrels last week and are about 4% below the five year average
    for this time of year. Propane/propylene inventories increased by 3.7 million barrels last
    week and are about 14% above the five year average for this time of year. Total
    commercial petroleum inventories decreased last week by 11.2 million barrels last week.

    Total products supplied over the last four-week period averaged 21.7 million barrels per
    day, up by 2.3% from the same period last year. Over the past four weeks, motor gasoline
    product supplied averaged 9.8 million barrels per day, up by 2.4% from the same period
    last year. Distillate fuel product supplied averaged 3.9 million barrels per day over the
    past four weeks, down by 5.5% from the same period last year. Jet fuel product supplied
    was down 1.2% compared with the same four-week period last yea

  27. Robert Inget on Wed, 28th Aug 2019 9:38 am 

    OK Here’s your answer. (around consumption)

    Demand remains heavy. Gasoline turned up this week.

    Farmers dictate diesel demand.
    Expect more bean and corn farmers to be bought up by corporate interests.

    Wasn’t that the plan?

  28. Robert Inget on Wed, 28th Aug 2019 9:54 am 

    Giovanni Staunovo
    @staunovo
    (my comment)
    11m
    US crude imports by country in kbpd (w/w changes)

    Canada -429 to 3201 (cutting production)
    Saudi Arabia +160 to 531
    Venezuela unchanged at 0
    Mexico +4 to 531 (most returned as refined)
    Iraq -302 to 205
    Colombia -213 to 283
    Nigeria -450 to 57
    Ecuador +32 to 248 (USD$ state)
    Brazil +111 to 239
    Kuwait +47 to 47

  29. Robert Inget on Wed, 28th Aug 2019 10:26 am 

    Remember, oil spikes come before economic downturns.

    Yield curve inversions are bullish for oil, not bearish. The last few times there was a major yield curve inversion, it sent oil higher anywhere from 80% to 140%. (remember 2008)

    So, young men, women, when you begin to see $4.00+ gasoline, start looking for another, safer job. Better yet, cut frills and hunker down.

    If WTI hangs around $60 for months, that’s a good sign. Higher than $65 means ‘look out’!

    If Trump goes quietly to a hospital or remote, fenced, golf course, it will still take a generation
    for agriculture, basic, to recover.

  30. Davy on Wed, 28th Aug 2019 11:46 am 

    “Yield curve inversions are bullish for oil, not bearish. The last few times there was a major yield curve inversion, it sent oil higher anywhere from 80% to 140%. (remember 2008)”

    Come on bob, deglobalization is not bullish for oil. You are barking up the wrong tree.

  31. Cloggie on Wed, 28th Aug 2019 12:28 pm 

    “Clogforia, a question. If those electrified trucks hit a slippery patch and end up well beyond the reach of their masts, do they have any battery power allowing them to get back in contact with the wires or do they become a traffic blockade until a tow truck comes along to remarry them with their source of go?”

    Yes, every national road-rail/pantograph system assumes that a truck (or passenger car with rail) can bridge say 40 km autonomously. No need to electrify every road, just the main arteries. In that case you don’t need monstrous batteries.

    Additional benefit: electrical current flowing through a national pantograph system doesn’t need to flow through regular grids, the sort of grid green-left troublemakers are so opposed to. You know the types.

  32. Sissyfuss on Wed, 28th Aug 2019 1:57 pm 

    That sounds like retrograding to an old system that has been improved. When I was 5 in 1955 in Chicago I remember watching the buses masts bouncing along the electric cables showering sparks and making loud buzzing noises that resembled a warning. But the buses were quiet and it beat walking.

  33. Cloggie on Wed, 28th Aug 2019 2:01 pm 

    To refresh memory… for passenger cars, pantograps are impractical. Sweden is working on a rail alternative:

    https://deepresource.wordpress.com/2018/05/08/e-road-e-vehicles-breakthrough-in-sweden/

  34. Cloggie on Wed, 28th Aug 2019 2:09 pm 

    Just arrived in Danzig and completed my first exploration. What a treasure it is! Very similar to Amsterdam, with without canals… and Moroccans:

    https://youtu.be/tWivRo8qOPw
    https://youtu.be/kOZAXVvhYcQ

    Most German cities were like that.
    Ah well.

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