Yesterday, OPEC published its Monthly Oil Market Report (MOMR) and the EIA published its Short-Term Energy Outlook (STEO). The IEA, which is generally regarded as the most authoritative of the major public supply/demand forecasters, publishes its Oil Market Report today.
There was little change to OPEC’s projections which continue to suggest that oil markets will be in significant surplus for both 2012 and 2013. However, the EIA carried out a raft of adjustments to its forecasts resulting in it actually forecasting 2012 as a deficit year, followed by a modest surplus in 2013.
The main reason for the substantive shift in the EIA’s forecast from surplus to deficit in 2012 is a net 0.3mmb/d increase in demand coupled with a comparatively low estimate for OPEC crude production.
According to the EIA, global demand for 2012 is now estimated at 89.09mmb/d (+0.26mmb/d MoM) and at 90.10mmb/d for 2013 (+0.4mmb/d MoM). In conjunction with minor downgrades for non-OPEC production, that leaves the ‘call on OPEC’ for 2012 at 30.97mmb/d. That is higher than OPEC production of 30.65mmb/d for August, as estimated by the EIA.
OPEC reports its crude production, based on secondary sources, increasing to 31.41mmb/d for August, up 0.25mmb/d from July. This is largely attributable to increased production in Angola after the Girassol field returned to production. Meanwhile, the MOMR has Iranian production, based on secondary sources, marginally down to 2.77mmb/d (-0.01mmb/d MoM) while the EIA estimates Iranian production falling 0.1mmb/d MoM to 2.7mmb/d. Other sources have Iranian production largely flat, with MEES even reporting a 0.05mmb/d increase in production from July.
IEA projections have consistently indicated a substantial surplus in global oil markets, based on current OPEC production, amounting to 1.3mmb/d as of the August report. We expect only minor changes in its supply/demand outlook for 2012 and an increase in OPEC crude production, above its ‘call on OPEC’ for 2012.