Benchmark spot crude oil prices were steady in a $40-45/bbl range after an early-January surge. Lower OPEC output offset falling demand. Gasoline and naphtha have recovered significantly as refiners trim output to stem losses, thus improving refining margins.
Forecast global oil demand is revised down by 570 kb/d to 84.7 mb/d in 2009 (-1.1% or -1.0 mb/d year-on-year) after the IMF again slashed its GDP growth prognosis to 0.5%. Our 2008 estimate remains largely unchanged at 85.7 mb/d (-0.4% or -0.4 mb/d versus 2007). Two consecutive years of demand decline have not occurred since 1982/83.
Global January oil supply fell by 520 kb/d to 85.2 mb/d, largely on lower OPEC output. 2008 and 2009 non-OPEC supply is revised down by 20 kb/d and 110 kb/d respectively, resulting in 2009 growth of 0.4 mb/d to 50.9 mb/d. OPEC NGL output in 2009 is trimmed by 0.4 mb/d to 5 mb/d on lower gas output and project delays, implying +0.3 mb/d growth year-on-year.
OPEC crude supply in January fell by an estimated 950 kb/d to 29 mb/d (now excluding Indonesia) as output curbs deepened. Effective OPEC spare capacity is 4.4 mb/d. The ‘call on OPEC crude and stock change’ for 2009 now stands at 28.8 mb/d, at least 1.7 mb/d below 2008, but potentially 1.5 mb/d above OPEC-12 output implied by the current target.
OECD industry stocks fell by 20.1 mb to 2,673 mb in December, but 4Q08 still saw a counter-seasonal build of +170 kb/d on low refinery runs. Forward cover was steady at 57 days, 4.5 days higher on the year. Preliminary January data indicate a further 8 mb stockbuild, while short-term floating storage reportedly rose as high as 50-80 mb.
Global 1Q09 refinery crude throughput is revised down 0.3 mb/d to 71.9 mb/d, 2.0 mb/d lower year-on-year, on the back of weaker demand, run cuts by US and Japanese refiners and heavier US maintenance. Non-OECD weakness is concentrated in China and Other Asia, whose collective throughput is 0.8 mb/d below last year.
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