The past few days has seen the release of key agency forecasts, with OPEC and the EIA monthly reports released yesterday whilst the IEA report was released this morning.
Upward revisions to 2012 and 2013 global oil demand are the most prominent features in the latest forecasts from the OPEC and EIA monthly reports, although the IEA revised their demand lower, citing IMF's lower economic growth projections. In our view, it is difficult to reconcile how a pick-up in global growth from 3.2% in 2012 to 3.5% in 2013 (IMF projections) results in lower oil demand y/y growth (1.02 mb/d in 2012 and 0.84 mb/d in 2013), especially when growth from China poses upside risk to both economic and oil demand statistics.
Non-OPEC supplies were kept broadly unchanged across the key agency forecasts, with only the EIA making substantial downward revisions to their 2013 estimates, albeit from a very high base. Consensus expectations point to a y/y increase of around 1 mb/d in 2013 for non-OPEC supplies, with almost all of it coming from North America.
OPEC production estimates showed a sharp fall in output in December and January, across the three reports, led by Saudi Arabia and Libya. While the former is to do with seasonally lower domestic crude burn and global refinery maintenance, the latter underpins the resurgence of geopolitical tensions in North Africa since last month. In Algeria too, the withdrawal of staff by BP, Statoil and Cepsa (impacting Cepsa's 0.15 mb/d Ourhoud operations) could contribute to production shortfalls in the near term according to the agency.
With the exception of the IEA, the ‘call on OPEC' was revised higher for 2013, although given the risks highlighted to OPEC production, it may well be the case that actual OPEC production falls short of the level required by the market in order to balance demand and non-OPEC supplies.
Estimates of OECD inventories by the IEA across Q4 show a large stockdraw of 0.55 mb/d, following three quarters of build. Chinese crude stocks also drew (although product stocks build) and yet, in their (IEA) balances, there is a 0.4 mb/d build in global stocks, in contrast to EIA, OPEC and our own balances. We expect the IEA to revise their figures in the coming months.