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Has A Supply Deficit Already Emerged?

Cushing

Friday April 14, 2016

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. Oil demand slips

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- The IEA downgraded its projection for global oil demand growth for 2017, expecting an annual increase of 1.3 mb/d compared to 2016, down from the last month’s projection of 1.4 mb/d.
- Demand in the U.S. and Japan was actually lower in the first quarter compared to a year earlier, and growth in places like Russia, Korea and the Middle East is now slower than previously expected.
- China still posted a 430,000 bpd increase in the first quarter, year-on-year.
- But India, a country that has been billed as the largest source of future demand growth, was disappointing. A debacle with India’s currency reform has hit economic growth and first quarter oil demand was flat compared to a year earlier.
- The IEA even said the 1.3 mb/d estimate could prove to be too optimistic.
- Slow demand could delay the oil market rebalancing, and delay any price gains.

2. But oil market already in supply deficit?

(Click to enlarge)

- Despite slowing demand growth, the IEA said in its latest report that “it can be argued confidently that the market is already…

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