Oil Market: Supply Shortages Reinforce Cautious Forecasts
BMI View : We started the year cautiously with our crude oil production forecasts. Our caution has been justified, with limited upsides to production in the first four months of the year. We have downgraded our global crude oil production forecast to reflect persistent outages amongst the world oil producers. We have also downgraded oil consumption for several of the largest Asian consumers such as India, South Korea and Japan, in line with more bearish macroeconomic expectations; however an upgrade to the US oil consumption for 2014 has offset the Asian downgrades.
Over the first quarter of 2014 we downgraded our oil production forecasts for important producers (regional and global) like Saudi Arabia, Iran, Angola, South Sudan, Denmark, China, USA, Venezuela and Azerbaijan. We have decreased our oil production forecast by 900,000 barrels per day (b/d), while we have slightly increased our global oil consumption by 235,000 b/d. Our global crude oil supply/demand balance has therefore slipped into a deficit for the year of 625,000 b/d.
With the 2-year setback announced at the Kashagan oil project in Kazakhstan, a prospective 180,000b/d to 200,000 b/d will not flow to the markets. This would have been the largest greenfield addition to global oil supplies this year, but we have pushed it back to late 2015 in our forecasts and there is a high risk of further delays.
|Persistent Outages Create A Deficit|
|Global Oil Demand, Supply and S/D Balance, 000s b/d|