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OPEC Monthly Oil Market Report, June 2012

Published Tuesday, June 12th, 2012

OPEC, in its latest monthly report, left this year’s oil demand growth unchanged at 900,000 bpd. The cartel sees demand for its crude at 30.74 mbpd for the second half of this year. Looking at the demand figures the organization probably thinks that there will be some kind of economic relief during the second half of the year. There is a sharp contrast in demand figures between 1H and 2H. Global demand will stand 89.71 mbpd, up 100,000 bpd from last month in the July-December period as opposed to 87.65 mbpd (-70,000 bpd from May) in 1H. Since non-OPEC production was revised up by only 50,000 bpd in 2H the call on OPEC oil increased by 50.000 bpd for the period. Taking into account May OPEC production of 31.582 mbpd, based on secondary sources, global stock build will be 840,000 bpd in 2H vs 2.44 mbpd in 1H.

 

As far as OPEC supply is concerned there is a difference of about 1 mbpd between estimates based on secondary sources (31.582 mbpd) and the member countries’ own admission (32.567 mbpd). Saudis sees their production declining 300,000 bpd from April to May (from 10.1 mbpd to 9.8 mbpd), whilst secondary sources see it growing by 40,000 bpd (from 9.877 mbpd to 9.917 mbpd). With the OPEC meeting around the corner it is worth noting that Iran does not think OPEC should increase its output ceiling. The Saudi oil minister, on the other hand, said yesterday that some kind of increment may be necessary although this morning he was quoted saying that he is happy with OPEC’s current output targets. Given that the 30 mbpd production quota is purely theoretical and the actual production is well over 1 mbpd above it the Saudi oil minister might not have contradicted himself; he could have merely hinted at raising the “official” quota to the actual production level.

Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.


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