OPEC bulletin 2/18
MOMR … oil market highlights
M a r k e t R e v i e w
OPEC Reference Basket (ORB)
aged $62.06/barrel in December, its high-
est since June 2015. On the yearly basis, the
ORB averaged $52.43/b, a gain of 29 per
cent or $11.67/b over the previous year. Oil
prices received wide-ranging support from
production adjustment resulting from the
Declaration of Cooperation (DoC), strong
economic and demand growth, as well as
sentiment in the financial markets. ICE
Brent increased $1.23 at $64.09/b, while
NYMEX WTI increased $1.28 at $57.95/b.
The spread between ICE Brent and NYMEX
WTI spread narrowed slightly to $6.15/b in
December. The Brent, WTI and Dubai mar-
ket structure held backwardation. Sweet/
sour differentials widened in Europe and
Asia, and narrowed in the US Gulf Coast.
global GDP growth
at 3.7 per cent for both 2017 and 2018. US
growth was revised up in 2018 to 2.6 per
cent, after growth of 2.3 per cent in 2017.
Growth in the Euro-zone was lifted to 2.4
per cent in 2017, followed by 2.1 per cent in
2018. Similarly, Japan’s growthwas lifted in
both 2017 and 2018 to now stand at 1.8 per
cent and 1.6 per cent, respectively. India’s
somewhat softening momentum led to a
slight downward revision to 7.2 per cent in
2018, after growth of 6.5 per cent in 2017.
China’s growth is expected to remain at 6.8
per cent in 2017 and 6.5 per cent in 2018.
Global oil demand
growth in 2017 was
revised upward by 40,000 b/d to stand
at 1.57m b/d, averaging 96.99m b/d for
2017. The upward revision was broadly
a result of better-than-expected data for
OECD Europe and China. For 2018, oil de-
mand growth is anticipated to be around
1.53mb/d, following amarginal upward ad-
justment compared to last month’s report,
with global oil demand now expected to
reach 98.51m b/d. Non-OECD economies
will contribute 1.24m b/d of the demand
growth expected in 2018.
growth in 2017 has
been revised marginally lower to now
stand at 770,000 b/d. The adjustments
were mostly due to revisions in the actual
data for 4Q17. For 2018, non-OPEC supply
growth was revised up by 160,000 b/d to
now stand at 1.15m b/d, driven by mostly
higher growth expectations for the US and
Canada. OPEC NGLs are also expected to
growby 180,000b/d in 2018, compared to
170,000 b/d growth in the previous year.
OPECproduction inDecember, according to
secondary sources, is expected to increase
by 42,000 b/d to average 32.42m b/d.
in the Atlantic Basin con-
tinued to lose ground as refining margins
narrowed further. In the US market, losses
could be attributed to a weakening in the
top and middle of the barrels, which off-
set gains in the diesel complex, driven by
the impact of winter storms on domestic
demand. In Europe, product market plum-
metedwith losses seen across the barrel as
refinery margins hit a 16-month low due to
rising crude prices and supply-side pres-
sure. In Asia, product markets remained at
healthy levels amid firmdomestic demand.
spot freight rates ingeneral did
not show considerable gains in December.
Average dirty tanker spot freight rates was
almost stable from the previous month.
VLCC freight rates declined during the
month as earnings dropped on the back
of high vessels availability. Meanwhile,
tonnage demand remained limited in
December and transit delays sawa decline,
supported by high tonnage availability.
Clean tanker spot freight rates strengthened
West of Suez as a result of a tightening in
vessel supply, mainly in theMediterranean.
Total OECD commercial
November to stand at 2,933m b. At this lev-
el, OECD commercial oil stocks are about
133m b above the latest five-year average.
Crude andproduct stocks indicate a surplus
of around 114m b and 19m b above their
seasonal norms, respectively. In terms of
days of forward cover, OECD commercial
stocks stand at 61.8 days in November,
some 1.9 days higher than the latest five-
in 2017 is estimated at 32.9m
b/d, which is 600,000 b/d higher than
2016. In 2018, OPEC crude is projected at
33.1m b/d, about 200,000 b/d higher than
in the previous year.
The feature article and oil market highlights are taken from OPEC’s Monthly Oil Market Report (MOMR) for January 2018. Published by the
Secretariat’s Petroleum Studies Department, the publication may be downloaded in PDF format from our Website(www.opec.org)
OPEC is credited as the source for any usage. The additional graphs and tables on the following pages reflect the latest data on OPEC
Reference Basket and crude and oil product prices in general.