The International Energy Agency (IEA) has released its February oil market report, outlining its views on oil supply and demand for 2025 as follows:
· Global oil demand growth is projected to average 1.1 mb/d in 2025, up from 870 kb/d in 2024. China will marginally remain the largest source of growth, even as the pace of its expansion is a fraction of recent trends and driven almost entirely by its petrochemical sector. At the same time, India and other emerging Asian economies are taking up increasing shares. OECD demand is forecast to return to structural decline following a modest increase last year.
· World oil supply plunged 950 kb/d to 102.7 mb/d in January, as seasonally colder weather hit North American supply, compounding output declines in Nigeria and Libya. Supply was nevertheless 1.9 mb/d higher than a year ago, with gains led by the Americas. Global oil supply is on track to increase by 1.6 mb/d to 104.5 mb/d in 2025, with non-OPEC+ producers accounting for the bulk of the increase if OPEC+ voluntary cuts remain in place.
· Global crude runs fell by 1 mb/d to 82.9 mb/d in January as a cold snap and planned maintenance work reduced US runs. Throughputs are forecast to average 83.3 mb/d this year, with gains of 580 kb/d y-o-y led by non-OECD regions. Sour crude refining margins collapsed in Asia in mid-January, as new US sanctions on Russian boosted Dubai crude prices. Atlantic Basin margins benefited from higher middle distillate cracks.
· Global observed oil stocks fell 17.1 mb m-o-m to 7 647 mb in December, as crude oil stocks plunged by 63.5 mb and products stocks rose by 46.4 mb. OECD industry inventories continued to decline, by 26.1 mb to 2 737.2 mb, 91.1 mb below their five-year average. Preliminary data show total global inventories falling a further 49.3 mb in January, led by a large crude stock draw in China.
· North Sea Dated rallied $8/bbl in early January, briefly trading at a five-month high of $83/bbl, fuelled by new US sanctions on Russia and a Northern Hemisphere cold snap. However, most of these gains then reversed after macro sentiment soured, with the prospect of higher US tariffs raising fears of an emerging trade war. Dated ended the month at $77/bbl, up $2.50/bbl, and was trading at around this level in early February.