oil producer , our nation is in a position of strength , after decades of feeling captive to faraway events and to the decisions of others .”
Climate Progress : “ Generation Energy is succeeding in protecting the environment and achieving cleaner air . … The risks of climate change are real . Industrial activity around the globe impacts the climate . And America ’ s natural gas and oil industry is meeting the climate challenge head-on . … When it comes to carbon , no nation has reduced emissions more than America has over the last decade . Smart policy explains only part of that progress . The single greatest factor is clean natural gas . Not only has it altered the economic landscape ; it makes progress possible in renewable energy as well .”
API is a national trade association representing the natural gas and oil industry . API ’ s more than 600 members include large integrated companies , as well as exploration and production , refining , marketing , pipeline , marine businesses , and service and supply firms .
� IEA OIL MARKET REPORT
These highlights are from the International Energy Agency ’ s latest Oil Market Report , issued on Jan . 18 :
Our estimates for global oil demand growth in 2018 and 2019 are unchanged at 1.3 mb / d and 1.4 mb / d , respectively . The impact of higher oil prices in 2018 is fading , which will help offset lower economic growth .
Non-OECD countries dominate oil demand growth in 2019 , with the 875 kb / d seen last year accelerating to 1.15 mb / d . China and India provide 62 % of the total . OECD growth will slow from 390 kb / d in 2018 to 280 kb / d in 2019 . The US provides 82 % of the OECD total .
Global oil supply fell by 950 kb / d in December , led by lower OPEC output ahead of new supply cuts . At 100.6 mb / d , supply was up 2.8 mb / d on a year ago . Following annual gains of a record 2.6 mb / d in 2018 , non-OPEC production growth is set to slow to 1.6 mb / d in 2019 .
OPEC crude oil output dropped by 590 kb / d in December , to 32.39 mb / d . Saudi Arabia cut back from record highs while Iran and Libya saw further losses . OPEC production is set to fall further in January , when new Vienna Agreement cuts take effect . Global refining throughput is estimated to have reached a record high of 84.2 mb / d in December , causing refinery margins to fall , despite the slide in crude prices . The refining system will have to absorb 2.6 mb / d of new capacity this year , its largest annual increase since the 1970s .
OECD commercial stocks fell 2.5 mb month-on-month in November to 2 857 mb . They showed little volatility during 2018 , moving within a narrow range of 60 mb and likely finishing the year 12 mb , or 0.4 %, higher than at the end of 2017 .
Benchmark crude oil futures prices fell to a 16-month low at the end of 2018 . Since the beginning of 2019 they have gained over 10 % and ICE Brent is currently close to $ 60 / bbl . Well-supplied markets , particularly for gasoline and jet fuel , pressured crack spreads .
Last month , we asked if there was a floor under prices following the signing of a new Vienna Agreement that aims to re-balance the oil market . Following an initial burst of enthusiasm for the deal , scepticism set in , alongside worries about the global economic background . Prices fell by $ 10 / bbl with Brent crude oil bottoming out on 24 December at just above $ 50 / bbl . For the producers , this was unwelcome , but for consumers it provided a nice present for the holidays . In the US Gulf Coast , gasoline prices in early January averaged $ 1.89 / gal versus the summer peak of $ 2.79 / gal and in India , prices are about 14 % below the early October peak . Recently , leading producers have restated their commitment to cut output and data show that words were transformed into actions . In December , OPEC production fell by almost 600 kb / d and Saudi Arabia has signalled that , for its part , further significant cutbacks will take place in January and beyond .
The Brent price has moved back above $ 60 / bbl , so the answer to our question posed last month seems to be a qualified yes , at least for now . However , the journey to a balanced market will take time , and is more likely to be a marathon than a sprint . While Saudi Arabia is determined to protect its price aspirations by delivering substantial production cuts , there is less clarity with regard to its Russian partner . Data show that Russia increased
Continues on page 43
www . fueloilnews . com | FUEL OIL NEWS | FEBRUARY 2019 13