This week the key agency forecasts have been published. OPEC and EIA published MOMR and STEO yesterday the IEA published OMR this morning.
The standout feature across the key agency reports this month is the upward revision to the ‘call on OPEC crude’ for both 2017 and 2018. Across the IEA, EIA and OPEC Secretariat, the average 2017 call now stands at 32.8 mb/d, albeit still slightly lower than our figure of 33.0 mb/d in 2017, which is primarily due to our lower non-OPEC supply growth and higher demand growth estimates. We forecast that the 2018 call will be 32.9 mb/d, while the average of the third party estimates is also 32.9 mb/d (IEA 32.5 mb/d, OPEC 33.1 mb/d and EIA 33 mb/d).
This month the IEA revised 2017 demand growth marginally lower to 1.6 mb/d, matching our estimate of 1.6 mb/d for the year, due to weaker Q3 17 demand growth amid the impact of hurricanes on the US. The IEA’s 2018 demand growth estimate was revised marginally higher to 1.41 mb/d. The EIA’s 2017 demand growth estimate was unchanged at 1.35 mb/d, while 2018 demand growth was revised lower by 0.11 mb/d, to 1.58 mb/d. This is broadly similar to our forecast for 2018 of 1.5 mb/d of growth. The OPEC secretariat made marginal upward revisions to its demand growth estimates, with 2017 y/y growth at 1.45 mb/d (compared to 1.42 mb/d last month) and 2018 y/y demand growth at 1.39 mb/d (compared to 1.35 mb/d last month).
Non-OPEC supply growth estimates for 2017 were revised lower by OPEC to 0.7 mb/d, the EIA to 0.6 mb/d, while the IEA left it largely unchanged at 0.7 mb/d. Our estimate remains lower, at 0.5 mb/d growth for 2017, due to our expectations for declines outside of the US, while all the agency reports still show growth. For 2018, both the IEA and EIA revised their growth estimate higher to 1.6 mb/d and 1.5 mb/d respectively, close to our estimate of 1.4 mb/d, while OPEC lowered its estimate and remains an outlier at 1 mb/d.
Agency assessments of OPEC compliance with the production deal in September were mixed, with OPEC and the IEA reporting m/m increases, to 100% and 88% respectively, while the EIA is at the low end of the spectrum, showing compliance falling m/m to 71%, which we believe is incorrect. Our estimates have compliance down marginally m/m to 105%, from 107% in August.
OECD commercial stocks fell counter-seasonally in August, by 14.2 mb to 3,015 mb. The surplus to the five-year average fell to 170 mb compared to 180 mb based on preliminary data. September preliminary data also show a counter-seasonal 32 mb draw to 2,983 mb, cutting the overhang to the five-year average to 150 mb. Non-OECD stocks also fell sharply.