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World Oil Supply To Increase Further As OPEC+ Alliance Continues To Ease Output Cuts


The International Energy Agency (IEA) stated in its latest monthly update for May 2021 that global oil consumption is now forecast to rise by 5.4 mb/d in 2021, 270 kb/d lower than in previous Report. Europe and OECD Americas have been revised down by 320 kb/d and 515 kb/d respectively in 1Q21, while India’s Covid crisis led us to downgrade its demand in 2Q21 by 630 kb/d. The forecast for 2H21 is left roughly unchanged, however, based on expectations that vaccination campaigns continue to expand and the pandemic largely comes under control.

World oil supply rose 330 kb/d to 93.4 mb/d in April and will increase further in May as the OPEC+ alliance continues to ease output cuts. Based on the current agreement, global oil production is set to grow by 3.8 mb/d from April to December. For 2021 as a whole, world oil production expands by 1.4 mb/d year-on-year versus a collapse of 6.6 mb/d in 2020. Canada leads non-OPEC+ with growth of 340 kb/d while the US is set to contract by a further 160 kb/d.

Global refinery throughput in 2021 has been revised lower on demand downgrades, newly announced temporary and permanent shutdowns and in anticipation of a strong hurricane season in the US. As downward revisions mostly affected 2Q21, IEA maintains forecast of a strong ramp-up in refining activity in the next four months, with refinery runs expected to peak in August. After a 7.4 mb/d decline in 2020, refinery intake is expected to increase by 4 mb/d in 2021.

However, on a positive note for oil prices, the OECD industry stocks fell by 25 mb to 2 951 mb in March, reducing the overhang versus the 2016-2020 average to a marginal 1.7 mb. Product stocks led the draw by 31.3 mb, while crude inventories rose by 6.1 mb. The global supply and demand balance shows implied stock draws easing to 820 kb/d in 1Q21 from 2.28 mb/d in 4Q20. April data for the US, Europe and Japan show that industry stocks fell by a combined 5.8 mb in total.


2 Comments on "World Oil Supply To Increase Further As OPEC+ Alliance Continues To Ease Output Cuts"

  1. Outcast_Searcher on Fri, 21st May 2021 7:50 pm 

    The key thing is the supply is there if needed. The actual demand, via how rapidly the economic recovery occurs globally overall, will determine how much additional supply is actually needed.

    Given the slow pace of vaccinations in the third world, full recovery could take quite a while, which is STUPID, given the risk for problems from more variants.

  2. makati1 on Fri, 21st May 2021 10:10 pm 

    Outcast: Yes, and the oil supply will always be used at any cost. We will just be more limited by buying power and amount needed.

    This covid bullshit is just the normal flu with a lot of fearmongering propaganda. The virus is being used to promote the “Great Reset” the megalomaniac elite want so they can rule the world. Not going to happen. About 1/6th of the world’s population has been “vaccinated” and the resistance is growing. Time is running out for their big idea.

    Less than 3% of Filipinos have been vaccinated so far. about 2,700,000 have their first shot out of a population of 110,000,000+. Only about 800,000 have both shots and the Philippines is far ahead of most countries outside the 1st world. Already, the pressure is on to open everything so the economy can survive and grow. The WHO lies are growing thin. 100% vaccination not going to happen, ever.

    BTW: India is making a big deal about 4,000 people dying from covid in one day. Many more Indians die from starvation per day than that (about 6,000). About 362,000 per day die on average. 4,000 covid deaths is about 1/10 of the total daily. (~1,400,000,000)

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