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OPEC bulletin 11/17

MOMR … oil market highlights

November 2017

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


OPEC Reference Basket


$55.50/barrel in October, gaining $2.06/b

over the previous month and reaching the

highest value in more than two-and-a-

half years, with a year-to-date average of

$50.68/b. Crude futures also reached levels

not seen since mid-2015. ICE Brent ended

$2.13/b higher at $57.65/b, while NYMEX

WTI increased $1.72/b, reaching $51.59/b,

keeping the Brent-WTI spread above $6/b.

Prices have been supported by rising global

demand data and expectations that major

producing nations will extend a deal to ad-

just output and bring the oil market to a bal-

ance. Hedge funds raised net long positions

in NYMEX WTI and ICE Brent futures and op-

tions by 29,456 and 21,592 contracts, respec-

tively, to 281,244 and 530,237 lots. Brent and

Dubai remained in backwardation, while the

WTI contango eased. Sweet/sour differentials

narrowed in Asia and Europe, but widened on

the US Gulf Coast.


global economic growth

dynamic has

continued its momentum, with the forecast

for 2017 revised up to 3.7 per cent, from 3.6

per cent in last month’s report. Similarly, the

2018 forecast has been adjusted higher, as

well to stand at 3.7 per cent, compared to 3.5

per cent in the previous month. Particularly

OECD economic growth in 2017 was better

than expected so far. The OECD is seen grow-

ing by upwardly revised 2.3 per cent in 2017

and 2.2 per cent in 2018.

Goodmomentum—and a potential tax re-

form— in the US, the ongoing dynamic in the

Euro-zone and to some extent in Japan, solid

growth in China and India and an improving

situation in Russia and Brazil are supporting

the growth trend in the short-term.

World oil demand

growth is expected to

rise by 1.53 million barrels/day in 2017 af-

ter an upward adjustment of 74,000 b/d to

account for the better-than-expected per-

formance of China in 3Q17. In 2018, world

oil demand is foreseen reaching 1.51m b/d,

around 130,000 b/d higher than in the pre-

vious assessment.


oil supply

is now projected to

grow by 650,000 b/d y-o-y in 2017, repre-

senting a downward revision of 20,000 b/d

from last month’s report. For 2018, growth

in non-OPEC oil supply has also been revised

down by 70,000b/d to stand at 870,000b/d.

OPEC NGLs and non-conventional liquids are

expected to growby 180,000b/d in 2018, fol-

lowing an increase of 170,000 b/d in 2017.

In October 2017, OPEC crude oil production

decreased by 151,000 b/d, according to sec-

ondary sources, to average 32.59m b/d.

Product markets

in the Atlantic Basin weak-

ened inOctober due to seasonally-lower gaso-

line demand following the end of US driving

season. Nonetheless, US refining margins

have exhibited some improvement y-o-y on

the back of firm product demand and amid

low stock levels. In Europe, solid middle-of-

the-barrel demand offset weakness at the

top and bottom. Product markets in Asia also

weakened slightly, but remained at healthy

levels, supported by the onset of refinery


Sentiment in the dirty

tanker market


ally strengthened in October, as freight rates

for different classes showed improvements

on most major trading routes. Average dirty

tanker spot freight rates rose 16per cent com-

pared to the previous month, on the back of

improved seasonal tonnage demand, as well

as port and weather delays, among other fac-

tors. Despite healthy gains in October, the

shipping market remains in surplus, cap-

ping further increases in spot freight rates.

Meanwhile, clean tanker freight rates experi-

enced a relative decline, although remaining

above the levels of the same month last year.

Total OECD commercial

oil stocks

fell in

September to stand at 2,985m b. At this lev-

el, OECD commercial oil stocks are 154m b

above the latest five-year average. Crude and

products stocks indicated a surplus of around

129m b and 25m b, respectively, above the

seasonal norm. In terms of days of forward

cover, OECD commercial stocks stood at 62.3

days in September, some 1.9 days higher than

the latest five-year average.

Based on the current global

oil supply/de-

mand balance

, OPEC crude in 2017 is esti-

mated at 33.0m b/d, around 710,000 b/d

higher than in 2016. OPEC crude in 2018 is

estimated at 33.4m b/d, about 460,000 b/d

higher than in 2017.

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