15 May 2019 HIGHLIGHTS • Our 2018 oil demand growth estimate has been revised down by 70 kb/d to 1.2 mb/d and our 2019 forecast is reduced by 90 kb/d to 1.3 mb/d. Revisions for 2018 impacted mainly non-OECD Asia and African countries. The 2019 revision is seen in OECD Asia in 1Q19. • Non-OECD countries will drive global oil demand in 2019, adding 1.1 mb/d of growth, with China and India growing by 0.7 mb/d. Net OECD growth will be 0.2 mb/d, led by the US. Global oil demand will average 100.4 mb/d in 2019. • In April, global oil supply fell 300 kb/d, with Canada, Kazakhstan, Azerbaijan and Iran leading the losses. At 99.3 mb/d, output was up 775 kb/d on a year ago. In 2019, non-OPEC supply will grow 1.9 mb/d versus 2.8 mb/d last year. • OPEC crude output rose 60 kb/d in April to 30.21 mb/d as higher flows from Libya, Nigeria and Iraq offset Iranian losses. Effective spare capacity was 3.2 mb/d, with Saudi Arabia holding 70%. The call on OPEC is 30.9 mb/d in 2Q19, falling to 30.2 mb/d for 2H19. • In 2Q19, refining throughput is seeing a third consecutive quarter of lacklustre growth, but is expected to climb by 1 mb/d a month between May and August. A limited impact on refining activity in Europe is expected from the Druzhba pipeline disruption. • OECD oil stocks fell by 25.8 mb in March to 2 849 mb, more than the five-year average of 4 mb owing to counter-seasonal crude draws. In days of forward demand, stocks amount to 59.8 days, their lowest level since July 2018. • ICE Brent rose to a five-month high of $74.57/bbl in late April after the end of US waivers on Iranian exports, but has since fallen by 6%. Gasoline strengthened in April ahead of the peak demand season. Cracks for other products fell due to higher crude prices. webstore.iea.org TABLE OF CONTENTS HIGHLIGHTS ............................................................................................................................................................................................ 1 Markets remaining calm .......................................................................................................................................................................... 3 DEMAND ................................................................................................................................................................................................... 4 Summary ................................................................................................................................................................................................ 4 Fundamentals ........................................................................................................................................................................................ 5 OECD ..................................................................................................................................................................................................... 6 Non-OECD ........................................................................................................................................................................................... 9 Other Non-OECD ...................................................................................................................................................................... 12 SUPPLY .................................................................................................................................................................................................... 14 Summary ............................................................................................................................................................................................. 14 OPEC crude oil supply .................................................................................................................................................................... 16 Iran oil: waive goodbye? ..................................................................................................................................................................... 16 Non-OPEC overview ...................................................................................................................................................................... 18 REFINING ............................................................................................................................................................................................... 27 Summary ............................................................................................................................................................................................. 27 Margins ........................................................................................................................................................................................... 28 OECD refinery throughput ........................................................................................................................................................... 29 Druzhba: friendship turned sour ....................................................................................................................................................... 31 Non-OECD refinery throughput ................................................................................................................................................. 33 STOCKS .................................................................................................................................................................................................. 35 Summary ............................................................................................................................................................................................. 35 Recent OECD industry stock changes ....................................................................................................................................... 36 OECD Americas .......................................................................................................................................................................... 36 OECD Europe .............................................................................................................................................................................. 37 OECD Asia Oceania ................................................................................................................................................................... 38 Other stock developments ............................................................................................................................................................ 38 PRICES ...................................................................................................................................................................................................... 41 Market overview ............................................................................................................................................................................... 41 Futures markets ................................................................................................................................................................................ 41 Spot crude oil prices ........................................................................................................................................................................ 43 Spot product prices ......................................................................................................................................................................... 45 Freight ................................................................................................................................................................................................. 48 TABLES .................................................................................................................................................................................................... 49 INTERNATIONAL ENERGY AGENCY - OIL MARKET REPORT MARKET OVERVIEW Markets remaining calm The theme we identified in last month’s Report of “mixed signals” is appropriate again this month, with geopolitics and industry disruptions confusing the supply outlook, and the first change to our 2019 demand outlook for several months. The ongoing geopolitical supply concerns around Libya, Iran, and Venezuela have been joined in the past few days by the attacks on shipping off Fujairah and on two pumping stations in Saudi Arabia. At the time of writing, there is no disruption to oil supplies and prices are little changed. The IEA is monitoring the situation, particularly in view of the proximity of Fujairah to the strategically vital Strait of Hormuz. We are also monitoring the impact of the contamination of Russian crude oil passing through the 1.4 mb/d Druzhba pipeline system. The issue will be resolved in due course, eased by commercial and government stock draws by Russia’s customers. One consequence could be a loss of confidence in the quality of the crude flows and thus a search, where feasible, for alternative supplies that could intensify price pressures for heavy/medium sour crude oil. Despite the difficult geopolitical backdrop and other supply problems, headline oil prices are little changed from a month ago at just above $70/bbl for