(MENAFN- The Peninsula)
By Satish Kanady
DOHA: Oil output from the Middle East rose to a record high in June, with production rising above 31 million barrels per day for the third month running. High pumping rates in the Middle East and recovering flows in Nigeria has consolidated Opec market share, International Energy Agency (IEA) noted in its July Oil Market Report (OMR) yesterday.
The Middle East";s market share of global oil supplies rose to 35 percent, the highest since the late 1970s and reminded that even when US shale production does resume its growth, older producers will remain essential for oil markets.
'Saudi Arabia ramped up to a near-record rate of 10.45 mb/d and Nigerian flows partially recovered. Middle East producers sustained record pumping rates, consolidating market share and pushing Opec";s total output 510 kb/d above one year ago”, IEA said.
According to the report, global oil supplies rose by 0.6 mb/d in June, to 96 mb/d, after outages curbed Opec and non-Opec supplies in May, while production was 750 kb/d below as higher Opec output only partially offset non-Opec declines. Non-Opec supplies are set to decline by 0.9 mb/d in 2016, to 56.5 mb/d, before rising 0.2 mb/d in 2017.
Robust European demand supported second quarter 2016 global demand growth at around 1.4 mb/d year-on-year, momentum that will be roughly matched through the year as a whole. A modest deceleration is foreseen in 2017, as growth eases to 1.3 mb/d taking average deliveries up to 97.4 mb/d.
Crude oil prices eased from an early June peak above $52/bbl, but traded within a $45-$50/bbl range. Growing uncertainty over the global economy and the related dollar strength weighed, but the downside was limited by further declines in US production and inventories.
Opec crude output rose by 400 kb/d in June to an eight-year high of 33.21 mb/d, including newly re-joined Gabon.
OECD commercial inventories built by 13.5mb in May to end the month at a record 3 074 mb. Preliminary information for June suggest that OECD stocks added a further 0.9 mb while floating storage has continued to build, reaching its highest level since 2009.
May global refinery throughput plunged by almost 1 mb/d from April, to 1.5 mb/d year-on-year, as heavy outages took their toll in many regions. This lowered the second quarter estimate for global refinery intake to 78.54 mb/d — the first year-on-year drop in three years. The forecast for third quarter throughput is more steady at 80.95 mb/d.
On the investment side, the report noted: ' Chevron";s announcement that it is moving ahead with a $37bn expansion of the Tengiz field in Kazakhstan is good news, but the fact that the project will partly utilise existing infrastructure is key to making it viable at today";s oil prices. There is still an ominous investment gap building up in the oil industry that might, depending on how quickly today";s record high oil stocks are eroded, create the conditions for sharply higher prices over the medium term.”
The Peninsula