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OPEC bulletin 5–7/17

M a r k e t R e v i e w

MOMR … oil market highlights

June 2017


OPEC Reference Basket

fell 4.2 per

cent in May to average $49.20/b. Crude

futures prices tumbled as supply contin-

ued to be plentiful with US output continu-

ing its upward trend this year, despite OPEC

and non-OPEC production adjustments. ICE

Brent ended 4.5 per cent lower at $51.40/b,

while NYMEX WTI dropped five per cent to

$48.54/b. The Brent-WTI spread widened

to $2.86/b, further supporting US exports.

Money managers decreased bets on higher

oil prices in both exchanges, trimming com-

bined net length positions in futures and

options to November 2016 levels.

After stronger than anticipated growth

momentum since the beginning of the year,

the forecast for

global economic growth

has been revised up to 3.4 per cent in 2017,

following growth of 3.1 per cent in 2016. The

recent growth dynamic in the global econ-

omy has been confirmed with the exception

of potentially temporary dips in the US and

India. US growth in 2017 remains at 2.2 per

cent and the Euro-zone at 1.7 per cent, while

Japan’s growth forecast was revised up to 1.4

per cent. The forecasts for China and India

remain unchanged at 6.5 per cent and 7.0

per cent, respectively, in 2017. Similarly, the

forecasts for Russia and Brazil also remain in

line with the previous report at 1.2 per cent

and 0.5 per cent, respectively.

World oil demand

is estimated to grow by

1.44m b/d in 2016 due to upward revisions

of data, in line with the previous report to

average 95.12m b/d. Projected oil demand

growth for 2017was also unchanged at 1.27m

b/d to average 96.38m b/d. OECD consump-

tion is seen growing by 0.23m b/d in 2017,

in line with the previous report, following

offsetting revisions in OECD Americas and

Asia Pacific. The forecast for oil demand

growth in China and India have also been

left unchanged at 0.34m b/d and 0.12m b/d,


Non-OPEC oil supply

is estimated to have

averaged 57.30m b/d in 2016, a contraction

of 0.71m b/d and unchanged from the previ-

ous report. In 2017, non-OPEC oil supply is

projected to grow by 0.84m b/d, following a

downward revision of 0.11m b/d to average

58.14m b/d. Lower output from Russia, as

well as Brunei, the Sudans and Kazakhstan

following the OPEC and non-OPEC decision

to extend production adjustments for nine

months offset higher growth in Canada and

the UK. US oil supply growth for 2017 was

also revised down by 30,000 b/d due to

lower output than expected in 1Q17. OPEC

NGLs production and non-conventional liq-

uids forecast to grow by 0.17m b/d in 2017

to average 6.22m b/d. In May 2017, OPEC

crude oil production increased by 336,000

b/d to average 32.14m b/d, according to sec-

ondary sources.


in the Atlantic Basin fell in

May, despite the strength seen in US gasoline

crack spreads amid higher domestic demand.

This was due to weakness in the middle of

the barrel as relatively higher yields and

increased refinery utilisation outweighed the

improvement in gasoil demand. Meanwhile

in Asia, margins weakened on supply pres-

sure following the peak of the maintenance

season amid increasing inflows to the region.

Tanker market

sentiment weakened in May

as spot freight rates in both dirty and clean

segments mostly dropped from the previ-

ous month. The decline in freight rates was

driven by light tonnage demand and high

vessel availability. Aframax rates were the

exception, with average spot freight rates

improving due to high tonnage demand for

several destinations combined with port

delays and replacements. Clean tanker freight

rates declined on average, mainly due to a

weak market West of Suez.


OECD commercial oil stocks

fell in

April to stand at 3,005m b. At this level,

OECD commercial oil stocks were 251m b

above the latest five-year average. Crude and

products stocks stood at a surplus above the

seasonal norm of around 171m b and 80m

b, respectively. In terms of days of forward

cover, OECD commercial stocks stood at 64.1

days, some 4.1 days higher than the latest

five-year average.

Demand for OPEC crude

stood at 31.8m

b/d in 2016, some 2.0m b/d higher than in

2015. In 2017, the demand for OPEC crude

is projected at 32.0m b/d, around 0.3m b/d

higher than the previous year.

The feature article and oil market highlights are taken from OPEC’s Monthly Oil Market Report (MOMR) for June 2017. Published by

the Secretariat’s Petroleum Studies Department, the publication may be downloaded in PDF format from our Website



provided 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.