Crude oil futures fell to multi-month lows on both sides of the Atlantic in early August, while global oil demand growth is expected to increase by 90,000 bbl/day over previous estimates, the Organisation of Petroleum Exporting countries (OPEC) said recently.
Brent and WTI crude future prices fell sharply through July and into August as a result of the global oil surplus, rising inventories, and financial crises in Greece and China rippling through the European and Asian economies, and rising US crude stocks, OPEC said.
The anticipated relaxation of trade sanctions on Iran also pressured futures prices on the back of a likely increase in crude exports from the country in the near future, the cartel added. Brent and WTI futures fell from over $63/bbl and $60/bbl respectively in late June to under $50/bbl and $45/bbl respectively this week, according to ICIS data. World oil demand growth is likely to grow by 1.38 m bbl/day this year to 92.7 m bbl/day, an increase on estimates made in July, according to OPEC. Demand growth in 2016 is expected to be 1.34 m bbl/day, bringing total consumption to a record 94.04 m bbl/day, driven primarily by non-OECD country demand. OPEC´s world economic growth forecasts for 2015-16 are unchanged from July´s report at 3.2 per cent and 3.5 per cent.
Economic growth through 2016 is likely to be driven by OECD countries, the cartel added. Non-OPEC oil supply is likely to grow by an average of 0.96m bbl/day in 2015, above earlier forecasts as a result of higher-than-expected output from producers outside North America. However, non-OPEC supply for 2016 has been revised down 40,000 bbl/day to 0.27m bbl/day, OPEC added.
Product markets in the Atlantic Basin continued to see support from strong gasoline demand in the US, pushing crack spreads to two-year highs, while spreads in Asia narrowed on the back of lower seasonal demand and increasing supply pressure toward the end of maintenance season.