Afternoon Market Overview

OPEC has released their April monthly oil forecast. The report was more upbeat than the one released by the EIA on Tuesday. Tomorrow morning the IEA will release their monthly oil market assessment. Following are the main highlights of the report. •

The global GDP growth forecast remains at 3.8% for both 2017 and 2018. Expected US growth in 2018 is unchanged from the previous month at 2.7%, after growth of 2.3% in 2017. Growth in the Euro-zone was revised up to 2.3% in 2018, following growth of 2.5% in 2017. Japan’s 2018 growth forecast remains at 1.5%, after actual growth of 1.7% in 2017. India’s and China’s 2018 GDP growth forecasts remain unchanged at 7.2% and 6.5%, respectively, following 2017 GDP growth of 6.3% and 6.9%. • World oil demand growth for 2017 was adjusted higher by around 30 tb/d to 1.65 mb/d, mainly to account for up-to-date data in both OECD and non- OECD regions. Total world oil demand is now pegged at 97.07 mb/d for the year.

Similarly, world oil demand growth in 2018 was revised higher by 30 tb/d, compared to last month’s report, to now stand at 1.63 mb/d. • Non-OPEC supply for 2017 was revised up by 0.03 mb/d, mainly due to updated Canadian production data, • to now show growth of 0.9 mb/d for the year. For 2018, non-OPEC supply was also revised up by 0.08 mb/d from the previous month’s assessment, to now show growth of 1.71 mb/d year-on-year.

This is on the back of higher- than-expected output in the 1Q18, mainly in the FSU and the US, as well as some upward adjustments elsewhere. Non-OPEC supply is now estimated to average 59.61 mb/d for 2018. OPEC NGLs and non-conventional liquids’ production is estimated to grow by 0.18 mb/d year-on-year to average 6.49 mb/d in 2018. In March, OPEC crude production decreased by 201 tb/d to average 31.96 mb/d, according to secondary sources. • Preliminary data for February shows that total OECD commercial oil stocks fell by 17.4 mb to stand at 2,854 mb, which is 43 mb above the latest five-year average.

Crude stocks indicated a surplus of 55 mb, while product stocks saw a deficit of 12 mb below the five-year average. In terms of days of forward cover, OECD commercial stocks rose in February to stand at 60.6 days, which is 0.6 days lower than the latest five-year average. • In 2017, demand for OPEC crude is estimated to stand at 32.9 mb/d, 0.6 mb/d higher than the 2016 level. In 2018, demand for OPEC crude is forecast at 32.6 mb/d, 0.3 mb/d lower than in 2017.