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OPEC bulletin 3–4/17

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

MOMR … oil market highlights

April 2017


OPEC Reference Basket


$50.32/b in March, representing a decline

of 5.7 per cent from the previous month.

Crude futures also declined on concerns

about growing oil output and high crude

inventories in the US. ICE Brent ended 6.2

per cent lower at $52.54/b, while NYMEX

WTI decreased 7.1 per cent to $49.67/b. The

Brent-WTI spread widened to $2.86/b, sup-

porting US crude oil exports. Hedge funds

liquidated their large net long positions in

crude, contributing to the sharp drop in

oil prices.

Themomentum in global

economic growth

has been improving, resulting in an upward

revision in the 2017 forecast to now stand

at 3.3 per cent from 3.2 per cent previously,

while growth for 2016 remains at 3.0 per

cent. OECD growth in 2017 remains at 1.9

per cent, with the US and Euro-zone seeing

no revisions. Japan’s 2017 growth forecast

was revised up to 1.2 per cent from 1.1 per

cent previously. China’s 2017 growth was

also revised higher to 6.3 per cent from 6.2

per cent, while India’s forecast remains

at 7.0 per cent. Russia’s 2017 growth was

revised up to 1.2 per cent from 1.0 per cent,

while the forecast for Brazil is unchanged

at 0.5 per cent.

World oil demand

growth in 2016 was

kept broadly unchanged at 1.38mb/d, aver-

aging 95.05m b/d. For 2017, oil demand

growth is anticipated to be around 1.27m

b/d, following an upward revision of around

10,000 b/d to average 96.32m b/d. The

‘Other Asia’ group — which includes India

— is anticipated to lead oil demand growth

in 2017, followed by China and OECD

Americas. OECD Asia Pacific is the only

region anticipated to see a decline in oil

demand in 2017.

Non-OPEC oil supply

is estimated to have

averaged 57.32m b/d in 2016, representing

a contraction of 690,000 b/d y-o-y, follow-

ing a minor downward revision of around

30,000 b/d. In 2017, non-OPEC oil supply

is projected to grow by 580,000 b/d, fol-

lowing an upward revision of 176,000 b/d,

due to higher-than-expected growth in the

US and lesser contractions in Colombia and

China, to average 57.89mb/d. TheUS supply

growth forecast was revised up by 200,000

b/d to stand at 540,000 b/d. Output of

OPEC NGLs and non-conventional oils is

forecast to grow by 130,000 b/d in 2017,

following growth of 140,000 b/d in 2016.

In March, OPEC production decreased by

around 153,000 b/d, according to second-

ary sources, to average 31.93m b/d.

Product markets

exhibited a mixed per-

formance in the Atlantic Basin, as the lack

of export opportunities for gasoline amid

increasing inflows of middle distillates

impacted the Europeanmarket. Meanwhile,

stronger domestic gasoline demand in the

US ahead of the transition to summer grades

lent strong support to refinery margins. In

Asia, the lack of arbitrage amid increasing

inflows into the region weighed on the mar-

ket despite the onset of the spring refinery

maintenance season.


tanker market

showed a mixed pat-

tern in March. VLCCs exhibited an aver-

age decline of 23 per cent m-o-m in spot

rates on its various trading routes, as the

tonnage availability remained abundant.

In contrast, Suezmax and Aframax rates

increased m-o-m by 13 per cent and six

per cent, respectively, mainly due to tran-

sit delays in the Turkish Straits, discharge

delays in the east, and occasional tightening

in tonnage supply. The market experienced

higher monthly freight rates for clean tank-

ers on most reported routes.


OECD commercial oil stocks


in February to 2,987m b to stand 268m b

above the latest five-year average. Crude

and product stocks indicated a surplus of

around 227m b and 41m b, respectively. In

terms of days of forward cover, OECD com-

mercial stocks stood at 64.2 days, some 4.6

days higher than the latest five-year average.

Demand for OPEC crude

in 2016 is now

estimated to have stood at 31.7mb/d, which

is 1.9m b/d higher than the 2015 level. In

2017, demand for OPEC crude is projected

at 32.2m b/d, around 600,000 b/d higher

than the 2016 level.

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