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Page added on September 14, 2016
Global Oil Demand Slowing Faster Than Predicted, Glut To Last Well Into 2017
One day after the Organization of the Petroleum Exporting Countries (OPEC) released a report stating that global demand for oil will be lower than expected in 2017, the International Energy Agency‘s Oil Market Report for September states essentially the same thing: that global demand is slowing at a faster pace than predicted.
The IEA predicts that momentum in 2017 will ease to 1.2 million barrels per day (bpd) compared to 1.3 million bpd for 2016 – which itself was a downgrade of 0.1 million bpd on the IEA’s previous forecast due to “a more pronounced 3Q16 slowdown.”
The IEA states that next year’s predictions are due to “underlying macroeconomic conditions” remaining “uncertain”.
It seems the situation has deteriorated strongly in the eyes of OPEC as well as the IEA
Eugen Weinberg, head of commodities strategy, Commerzbank
Also in line with the OPEC report, the IEA calculates that “non-OPEC supply is expected to return to growth in 2017 (plus 380,000 bpd) following an anticipated 840,000 bpd decline this year.”
The agency paints a gloomy portrait of market conditions this year: in addition to the third quarter slowdown, it notes that “the anaemic outlook for refining throughput extends further amid downward revisions to our 2H16 forecast.
“Refinery runs in 2016 are set to grow at the lowest rate in a decade.”
Plus, Organization for Economic Cooperation and Development (OECD) total inventories built by 32.5 million barrels in July to a record of 3.111 billion barrels, according to the report: “As refinery activities reached a summer peak, crude oil inventories refused to decline until an exceptional storm-related draw hit the US in late August.”
The report prompted Eugen Weinberg, head of commodities strategy for Commerzbank, to remark, “It seems the situation has deteriorated strongly in the eyes of OPEC as well as the IEA … that we are in the third quarter of 2016 and we won’t see the ‘balancing-out’ over the next six months is definitely a major change.”
Julian Lee, oil strategist for Bloomberg First Word, was more outspoken: he told Bloomberg that the IEA and OPEC reports “put the nail in the coffin of this idea that the market is rebalancing on its own.”
Matthew Parry, senior oil analyst for the IEA, told Bloomberg television that “in the third quarter we saw much sharper pulldowns in China, in Europe, and even India coming off a little bit; we’re still predicting a mild uptick in the fourth quarter, but overall that means we’re trimming our 2016 growth figures by 0.1 million barrels per day – and in a market where you’ve got record OPEC supplies, this is quite significant.”
Still, Perry stresses that demand growth will continue, albeit lower than expected, “for the next five years” at least, partly due to “lots of poor countries where they’re buying vehicles and will drive those vehicles” – a reference to the numerous expanding middle-class economies emerging from non OECD countries.
OPEC’s September report shows demand down 530,000 bpd in 2017 and average surplus of 760,000 bpd.
15 Comments on "Global Oil Demand Slowing Faster Than Predicted, Glut To Last Well Into 2017"
Cloggie on Wed, 14th Sep 2016 6:34 pm
The world is following Richard Heinberg’s advice and is busy leaving oil before oil leaves the world.
Boat on Wed, 14th Sep 2016 6:54 pm
Global Petroleum and Other Liquid Fuels Consumption
Global consumption of petroleum and other liquid fuels is estimated to have grown by 1.4 million b/d in 2015. EIA expects global consumption to increase by 1.5 million b/d in 2016 and by 1.4 million b/d in 2017,
https://www.eia.gov/forecasts/steo/report/global_oil.cfm
Eugen Weinberg, head of commodities strategy, Commerzbank apparently doesn’t keep up with eia reporting. Both 2016 and 2017 demand were revised up over the last two months. In fact since Jan 2016 demand has risen from 1.3 to 1.5 mbpd.
rockman on Wed, 14th Sep 2016 9:14 pm
Cloggie – “The world is following Richard Heinberg’s advice and is busy leaving oil before oil leaves the world.” What data shows that? According to the EIA stats global oil consumption has increased from 88 mmbopd in 1Q 2011 to 94 mmbopd in 1Q 2016. If I read the thread correctly they are just predicting a smaller increase then they had earlier. Regardless they are still predicting an increase in 2017. Seems like the world has yet to “leave oil” with a prediction that it won’t start in 2017.
Cloggie on Thu, 15th Sep 2016 8:12 am
Flying, the high end of the oil economy. Here an animation of the development of Amsterdam Airport between 1916-2016:
https://www.youtube.com/watch?v=6Xvj_5JG1Oc
Historic timeline # passengers:
http://www.consultancy.nl/illustrations/news/detail/1460370504396_Aantal-passagiers-van-luchthavens-verdubbeld-in-15-jaar—1.jpg
In 2015 yet another record of 58.2 m.
In the first half of 2016 another 10% growth.
Shortonoil really must review his theory that growth is no longer possible in advanced economies, because it is bs. There is no peak oil, nowhere near it.
Unfortunately.
Davy on Thu, 15th Sep 2016 11:17 am
Clog, there is more to the global economy and what determines growth than Amsterdam Airport. You know how quickly Amsterdam airport could grind to a halt? Tomorrow. What productive result does all that sir travel give us? Nothing but CO2 we don’t need. I think you are mesmerized by development and unable to see the rot and decay that is in the foundation of the global economy. What about all the ghost airports? Ask the board of directors at Airbus and Boeing what’s going on lately with all the cancelled plane orders. What about Hanjin? A healthy growing global economy should not have such a bankruptcy. Your message is the BS because it is hollow and deceptive. Short is spot on. You can discount his message but not dismiss it because depletion and deflation are a real phenomenon.
Cloggie on Thu, 15th Sep 2016 11:37 am
Davy, I am not applauding the growth of Schiphol or any growth. Perhaps it does collapse tomorrow, I don’t know, you don’t know, shortonoil doesn’t know. What I do know that there is still real growth in Europe, China and elsewhere.
Davy on Thu, 15th Sep 2016 11:54 am
Clog, pretty obvious there is real growth in the world. The difficult part is determining if there is aggregate real growth. How much growth is malinvestment that is actually systematic waste? These are tough questions cornucopians don’t want to dwell on. There is far too much inconvient examples of decay, depletion, and deflation. That would not be so bad if we had a healthy earth but we ruined that too.
Anonymous on Thu, 15th Sep 2016 1:38 pm
Im not sure how airport expansion, which is
-environmentally ruinous
-expensive
-subsidized
-have huge physical footprints
-is the most expensive, energy and materials intensive way to travel-ever.
is supposed to serve as an example of ‘growth-is-good’. You seem to be of the belief that everyone here is a growth-hasnt-occurred denialist of some sort. Ive seen all kinds of ‘growth’ in my lifetime. Some of its beneficial and needed, but mostly, not. Want to know what else has grown? The road system. Lots more roads, wider roads, expensive roads. All pretty much clogged with oil-burning garbage cans, dumping gigatons of pollutants into the air, land water.
Just like your Amsterdam airport is.
Someone is ‘profiting’ from all that ‘growth’ too, but I would hardly call the relentless, cancerous growth of oil-powered transport, whether it has wings or wheels, to be a good thing.
At some point, that airport, will either be abandoned, or downsized. Even if infinite energy and materials were available, at some point, the airport would surpass the size of the Amsterdam itself, then the country, then all of Europe. Because you know, technological progress is infinite and inevitable, so, the airport would just keep growing(because progress-bigger=better) till all of Western Europe consisted of Amsterdam tarmac, terminals and duty-free shops of course.
Cloggie on Thu, 15th Sep 2016 2:14 pm
“is supposed to serve as an example of ‘growth-is-good’”
Sigh, nobody here said that airport growrh is “good”. It should merely serve as proof that shortonoil’s notion that advanced societies can no longer grow, because of “peak oil”, that idea is bogus.
We are not there yet.
joe on Fri, 16th Sep 2016 4:02 am
One needs to be careful about what they call ‘growth’, afterall EU stats include prostitution and other nonproductive activities in its stats. My own barometer is economies like Australia and Canada who feed into the biggest economic blocs. They are not doing so good. Not bad either. That said, the game is eternal growth forever, thats capitalism, thats its flaw and all the b****es on earth wont save the western world. Right now the EU meets on how to plan for the biggest divorce in history, and more importantly, who and how the EU pays for itself post Brexit which is a huge issue. The US faces a world which cant continue to go subverting itself to US controlled global institutions, combined with ever developing pollution causing industries we are all facing a world totally poised on the brink. In the end the EU, like ancient Rome will cause the destruction of the populations of Europe. Europe may be a fat money pot to lazy national governments but it will destroy to vibrant core that 50 years of post war democracy built up. By centralising all policy including national budgets, the cry will be ‘all power to the soviet’. In a generation, unelected officials will decide the fate of half a billion people who will have no choice. All forms of speech will be outlawed except for the wealthy and privileged. The west is in mortal danger because it has allowed non western nations to build up competitive advantage and supressed its own, both economically and culturally, so that western based companies and have more profit. Government complaints about tax havens etc it a symtom of a much bigger issue, one which drobe Brexit and is a bellweather for much tougher times ahead.
shortonoil on Fri, 16th Sep 2016 6:01 am
“The IEA predicts that momentum in 2017 will ease to 1.2 million barrels per day (bpd) “
At 1.2 mb/d, growth has now slowed to below the level where the extra oil being used is less than what extra oil is required to produce it (1853 BTU/ 140,000 BTU). In other words there is now no organic growth in the consumption of petroleum. Without organic growth there can be no rebalaning of the market. The only avenue to balancing is now through the reduction of production. To support the low price, which is crippling the industry, barrels produced must be reduced. The long awaited Peak in production has finally arrived.
http://www.thehillsgroup.org/
Cloggie on Fri, 16th Sep 2016 6:38 am
joe says: “Right now the EU meets on how to plan for the biggest divorce in history, and more importantly, who and how the EU pays for itself post Brexit which is a huge issue.”
You seriously think that Britain is still a big deal, don’t you? Its net EU contribution of GBP 8.5 is peanuts of course on an EU GDP of 18-19 trillion $. “Largest divorce in history”.lol That was the dissolution of the USSR. Britain should be far more worried about total isolation from EU markets. UK still exports 47% of its GDP to the EU. Nobody needs Britain. On the other hand, a Brexit means a loosening of th US grip on the EU, giving us more Spielraum for overtures to Russia and China and going along with the Chinese overland New Silk Road strategy of connecting Beijing to Rotterdam overland, completely ignoring Anglo navies.
https://www.theguardian.com/business/2016/may/10/uk-trade-deficit-hits-new-record-of-24bn-pounds-eu-referendum-brexit
Juncker & Merkel already said on several occasions that no UK cherry picking will be forthcoming:
http://www.dailymail.co.uk/news/article-3684325/You-t-cherry-pick-EU-laws-want-Brexit-Angela-Merkel-warns-Britain.html
New Silk Road:
http://thesaker.is/silk-roads-night-trains-and-the-third-industrial-revolution-in-china-by-pepe-escobar/
joe says: “n the end the EU, like ancient Rome will cause the destruction of the populations of Europe”
Only if we remain part of the kosher run US empire that is the real cause of the potential death of white people in the US, UK and EU alike. Don’t forget that so far London is the only formerly white city with a Muslim major. Good luck with that. So how about you worrying about your own country first.
“By centralising all policy including national budgets, the cry will be ‘all power to the soviet’. In a generation, unelected officials will decide the fate of half a billion people who will have no choice”
The EU is really still a very thin layer with a budget of perhaps 1-2% of EU gpd, you can’t compare that with the US. And a lot can and will happen in a generation.
“The west is in mortal danger because it has allowed non western nations to build up competitive advantage and supressed its own”
The real mortal danger comes from letting hostile non-Europeans invade our lands, not from their “competing economies”.
Cloggie on Fri, 16th Sep 2016 7:11 am
The globes are off: CSU party leader Seehofer now threatens openly he won’t support a renewed Merkel chancellorship if she doesn’t give in in the “refugee” issue:
http://www.spiegel.de/politik/deutschland/fluechtlinge-horst-seehofer-droht-angela-merkel-mit-endgueltigem-bruch-a-1112584.html
Without CSU support it is getting very difficult for Merkel to not step down next year.
The end of Merkel is getting closer again. Merkel is the #1 US satrap in Europe.
Cloggie on Fri, 16th Sep 2016 7:12 am
gloves
marmico on Fri, 16th Sep 2016 9:10 am
At 1.2 mb/d, growth has now slowed to below the level where the extra oil being used is less than what extra oil is required to produce it (1853 BTU/ 140,000 BTU).
What a crock of shit. You are a mindless fuctard.