In March, global crude oil markets were sluggish as a result of slow growth in China, reduced refinery demand and abundant supply, which offset supply issues and geopolitical crisis.
The forecast for global economic growth for this year stands at 3.4 per cent and the growth estimate for the previous year was 2.9 per cent. The OECD is expected to grow by 2 per cent in 2014. In 2013, China’s growth estimate was 7.7 per cent, which has been revised down to 7.5 per cent for 2014. India’s growth is expected to remain at 5.6 per cent in 2014.
Global demand for oil is expected to increase by 1.14 mb/d in 2014, largely unchanged from the previous year’s estimate, to average 91.2 mb/d. Global oil demand in 2013 increased by 1.05 million bpd to average 90.01 million bpd. Majority of thus demand growth came from non-OECD.
In 2014, non-OPEC oil supply growth is expected to be 1.37 million bpd, while the growth estimate for 2013 was at 1.34 mb/d. For this year growth is largely expected to come from Canada, Brazil and the US.
Product markets located in the Atlantic Basin have started losing their sheen since March primarily due to reduced support from heating fuel demand in the US. European product markets have also weakened because of declining exports. In Asia, the recovery in light distillates was offset by poor performance.
In March, dirty tanker spot freight charges declined due to reduced tonnage demand and refinery maintenance in the east. Tanker spot freight charges decline by 5 per cent because of tonnage availability on some major routes. However, clean tanker spot freight charges have increased.
In February, OECD commercial oil stocks declined due to reduced products. Crude and products stocks exhibited a deficit of 35 mb and 96 mb respectively when compared to the five-year average. US commercial oil stocks in March improved but remained 36.0 mb below the five year average.
In 2014, demand for OPEC crude is expected to decline 0.1 million bpd to average 29.6 million bpd. In 2013, demand for OPEC crude was at 30.0 million bpd.
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