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EIA STEO and OPEC MOMR: Deficit versus Surplus


The EIA published its Short-Term Energy Outlook (STEO) yesterday. The STEO has a small deficit for 2013 (-0.3mmb/d) but a small surplus in 2014 (0.2mmb/d), based on the EIA’s estimate for OPEC crude oil production in 2013 of 30.3mmb/d and 30.5mmb/d in 2014. However, assuming February’s OPEC production of 30.0mmb/d is held prospectively, then that market undersupply expands to 0.6mmb/d.

There were few notable changes in the EIA’s forecasts from the previous month’s STEO. For 2013, global demand has been cut 0.1mmb/d, due to lower OECD demand estimates, to 90.1mmb/d, while a similar cut for 2014 results in average global demand of 91.5mmb/d. Non-OPEC production was raised 0.1mmb/d. The EIA had recently pushed back its anticipated restart of South Sudan production to the second half of the year. Today’s announcement that the two Sudans had agreed to resume production provides faint hope of an earlier than expected resumption to exports. Crucially, however, the two sides have yet to reach processing and transportation agreements, meaning that there remains much uncertainty over the outcome.

OPEC also reported yesterday, releasing its Monthly Oil Market Report (MOMR). In contrast with the EIA’s numbers, OPEC has the market oversupplied to the tune of 0.60mmb/d in 2013, assuming that February OPEC production, reported at 30.3mmb/d and based on secondary sources, is maintained prospectively. The OMR has OPEC production, based on secondary sources, up 0.1mmb/d MoM, having downgraded January’s production by the same amount. Saudi production is estimated to have risen 0.04mmb/d MoM to 9.1mmb/d.

There are two main differences between the forecasts by the two agencies for 2013: the EIA has higher non-OECD demand and lower non-OPEC production than OPEC's estimates. The result is a circa 1mmb/d difference in the call on OPEC crude.

The IEA, which is generally regarded as the most authoritative of the major public supply/demand forecasters, publishes its Oil Market Report today. 

Colin Smith, Marc Jacouris
VTB Capital analyst


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