Summary of the IEA Oil Market Update - February 2025 Industry Overview - Industry: Oil & Gas - Region: Asia-Pacific Key Points Demand and Supply Projections - Global oil demand for 2025 is projected at 104.0 million barrels per day (MMbls/d), an increase of 1.1 MMbls/d from the previous year [2][9] - Non-OECD demand is expected to grow by 1.1 MMbls/d, with China contributing an unchanged 0.2 MMbls/d [2] Non-OPEC Supply Adjustments - Non-OPEC supply for 2025 has been revised down by 0.2 MMbls/d to 71.6 MMbls/d, reflecting a year-on-year increase of 1.4 MMbls/d [3][11] - OECD supply remains unchanged at 32.7 MMbls/d, with the US supply revised up by 0.1 MMbls/d and Europe down by 0.1 MMbls/d [3] OPEC Supply Dynamics - The call on OPEC crude for 2025 has increased by 0.2 MMbls/d to 26.7 MMbls/d, but is still 0.4 MMbls/d lower than in 2024, indicating a potential oversupply [4][25] - Total effective spare capacity for OPEC is estimated at 6.0 MMbls/d, which is 4.5% of the projected demand for 2025 [4][22] Inventory Trends - OECD commercial inventories fell by 26 MMbls in December, totaling 2,737 MMbls, which is 41 MMbls lower than a year ago and 139 MMbls below the 5-year average [5][17] - January estimates suggest a further decline of 20 MMbls in inventories [1] Refinery Throughput and Margins - Global refinery throughput is at 84.0 MMbls/d, up 0.7 MMbls/d year-on-year, but has been revised down to 83.3 MMbls/d for 2025 [6] - Product margins have decreased by US4.0/bbl, indicating ongoing challenges in the downstream sector [7] Investment Implications - The update presents an incrementally positive outlook for oil, despite the oversupply situation. Investors are advised to monitor inventory trends closely [25] - The potential resolution of the Russia-Ukraine conflict could negatively impact energy prices, particularly for gas and LNG, rather than oil [25] - A forecast price of US$70/bbl for Brent is anticipated due to market oversupply, with inventory builds being crucial for validating this outlook [25] Additional Insights - The report highlights the importance of geopolitical factors, such as the Russia-Ukraine conflict, and their potential impact on oil supply and pricing [25] - The unwinding of OPEC production cuts could lead to an increase in OPEC supply by 1 MMbls/d by year-end, but this is contingent on demand dynamics [25] This summary encapsulates the essential findings and projections from the IEA Oil Market Update, providing a comprehensive overview of the current state and future outlook of the oil and gas industry in the Asia-Pacific region.
IEA Oil Market Update - Initial perspectives. Positive update but Russia back in the spotlight