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Iraq violence stifles June oil prices according to IEA report

11th July 2014

Oil futures surged in mid‐June by USD 5/bbl to a nine-month high of more than USD 115/bbl for Brent as Islamist forces gained ground in Iraq, but later reversed their gains on confidence that Baghdad’s southern fields would remain untouched and improved prospects for a recovery in Libyan exports

Iraq violence stifles June oil prices according to IEA report
Global oil demand growth is forecast to accelerate to 1.4 mb/d in 2015 from 1.2 mb/d in 2014, as macroeconomic conditions improve

OPEC supplies were virtually unchanged in June at 30.03 million barrels per day (mb/d), as lower Iraqi production offset gains in Saudi Arabia, Iran, Nigeria and Angola. The ‘call’ on OPEC for 2H14 was cut by 350,000 barrels per day (350 kb/d) to 30.6 mb/d  on improved nonOPEC supply and lower demand, and is forecast to dip to 29.8 mb/d in 2015 from 29.9 mb/d in 2014.

NonOPEC supply is forecast to grow by 1.2 mb/d in 2015, down slightly on 2013 and 2014 forecast levels. Global supplies were largely unchanged monthonmonth in June, at 92.6 mb/d, but 995 kb/d higher than a year ago. Annual nonOPEC output growth of 1.7 mb/d more than offset OPEC declines of 765 kb/d.

Global oil demand growth is forecast to accelerate to 1.4 mb/d in 2015 from 1.2 mb/d in 2014, as macroeconomic conditions improve. The estimate of 2014  demand has been trimmed by 130 kb/d to 92.7 mb/d following weakerthanexpected midyear economic data.

Global refinery crude runs dipped below yearearlier levels in June, for the  first  time  since  October. Planned and unplanned  outages, capacity rationalisation and weak margins cut runs by 0.9 mb/d on the  year, to 76.8 mb/d. The 2Q14 estimate has been lowered by 0.3 mb/d, to 76.2 mb/d, while the 3Q14 forecast is unchanged, at 77.8 mb/d.

OECD  commercial oil inventories built by a steeperthanusual  44.2 mb in May, to 2 639 mb. Their deficit to the fiveyear average narrowed to 69.6 mb from a revised 106.1 mb at endApril. Refined products covered 29.0 days of demand at endMay, up 0.4 days on the month. Preliminary data show that OECD stocks rose by 8.3 mb in June.

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