• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 17 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 day The United States produced more crude oil than any nation, at any time.
  • 7 days e-truck insanity
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 6 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 5 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 5 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 7 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 7 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 10 days Bankruptcy in the Industry
Iraq Has No Intention of Restarting Kurdish Oil Pipeline

Iraq Has No Intention of Restarting Kurdish Oil Pipeline

Baghdad is repairing the Kirkuk-Ceyhan…

U.S. Senator Pushes for Ban on Chinese Electric Vehicles

U.S. Senator Pushes for Ban on Chinese Electric Vehicles

Senator Brown urges President Biden…

The EU Allows Members to Ban Russian LNG as Imports Climb

The EU Allows Members to Ban Russian LNG as Imports Climb

The European Parliament approved rules…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Premium Content

IEA Predicts A Dip In Crude Demand Growth Next Year

IEA Predicts A Dip In Crude Demand Growth Next Year

Thirty-five years to the day after AC/DC’s ‘Back in Black‘ went platinum, and storm clouds are returning to darken financial markets once more. Jumping right into overnight action, Chinese economic data was considerably underwhelming.

Imports for September came in at a rather horrible -20.4 percent YoY, down from last month’s poor -13.8 percent, and below consensus of -15 percent. This print is a smidge shy of being the worst since mid-2009 (hark, the belly of the great recession).

Cratering imports is indicative of a lack of domestic demand for goods, pointing to ongoing economic weakness in China. To counter this poor news, Chinese exports came in better than expected, only dropping 3.7 percent versus consensus of -6.3 percent. Silver linings, folks, silver linings. Related: China To Continue Expanding Its Influence In The Oil And Gas Sector

ChineseOilImports

Chinese oil imports, percent YoY (source: investing.com)

Onto European economic releases, and German inflation data was expectedly as flat as a pancake (YoY), while the UK slipped back into deflationary territory at 0.1 percent (YoY) in September. German sentiment data (ZEW) was below consensus for both current conditions and its six-month outlook. The Eurozone six-month outlook was in line with consensus, but still down for a sixth consecutive month. Hum dee dum, not great.

IEA today has completed the triumvirate of monthly reports from the acronymtastic trio of agencies – EIA, OPEC, IEA – and has delivered a message which tilts a little more bearish than yesterday’s OPEC report. It points to an ongoing overhang of excess supply through next year due to slowing demand and the return of Iranian barrels. Related: Tanker Companies Profiting From Low Oil Prices

Global demand growth was revised up from last month by 100,000 barrels per day to 1.8 mn bpd for this year, while next year was revised down by 200,000 bpd to 1.2 mn bpd, with a deteriorating macro-economic outlook cited as the reason for the drop.

In terms of supply, it sees non-OPEC supply dropping by nearly 500,000 bpd next year due to significant spending cuts, while this in part will be offset by rising OPEC production. IEA dovetails with OPEC’s report yesterday in terms of seeing OPEC production rise last month, despite a drop in Saudi output.

DemandGrowthSlows

While we do not get the API weekly inventory report until tomorrow, nor the EIA report until Thursday due to the observation of Columbus Day yesterday, we do get the EIA’s monthly drilling productivity report today, which should make for interesting reading.

We highlighted here last week how freight rates have been rapidly increasing recently, with VLCC rates to Asia from the Middle East and West Africa surging to multi-year highs due to a shortage of available vessels. This has less to do with rampant demand, and more to do with a build-up of cargoes waiting to offload in Asia, and specifically, China.

#ClipperData indicates a number of ships are idling around Singapore, pointing to either a lack of places to store the oil, or a lack of buyers in the first place. Essentially, it’s a supertanker traffic jam. Related: Romania Wants New Gas Supplies To Break Russian Gas Hold

This lack of vessels is translating into lower West African flows. In terms of West African crude exporters, Nigeria and Angola are the largest. If Angola’s loadings remain at the same pace for the rest of the month as they have done so far in October, it will be their lowest level of exports this year. Meanwhile, Nigeria’s loadings would be at a four-month low.

ADVERTISEMENT

NigeriaAngolaCrudeExports

Nigeria / Angola crude exports (source: ClipperData)

By Matt Smith 

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News