IEA sees surge in oil demand from India, emerging nations

Surge in oil demand in India and other emerging nations will lead to reduction in global oil surplus in the first half of 2016, the International Energy Agency (IEA) said today.
Keeping the global growth unchanged at 1.2 million barrels per day for the year, the Paris-based IEA said supply will exceed demand by an average of 1.3 million bpd in the first six months of 2016, down from the 1.5 million projected a month ago.
IEA's Oil Market Report for May "revised global oil demand growth for the first quarter of 2016 upwards to 1.4 million bpd, led by strong gains in India, China and more surprisingly, Russia. For the year as a whole, growth will be around 1.2 million, with demand reaching 95.9 million bpd."

The first quarter growth was driven by China, Russia and by transport fuel use in India.
"India is the star performer: oil demand in the first quarter of 2016 was 400,000 bpd higher year-on-year, representing nearly 30 per cent of the global increase. This provides further support for the argument that India is taking over from China as the main growth market for oil," the IEA said.
The forecast for world oil demand at 95.9 million bpd this year is higher by 100,000 bpd over previous year.

It said output from non-OPEC producers is expected to fall by 800,000 bpd in 2016, larger than previous forecast of 710,000 bpd fall.

"The global supply surplus of oil will shrink dramatically later this year," said the agency, which advises 29 of the most industrialised nations on energy policy.
IEA said global refinery throughput for the current quarter is forecast at 79.6 million bpd, with the 0.7 million bpd year-on-year gain falling below anticipated demand growth of 1.2 million bpd.
"The estimate for the previous quarter has been revised higher by 0.2 million bpd to 79.5 million bpd. India and Saudi Arabia are set to lead global annual increases this year," it added.
IEA said higher than expected Iranian oil production has helped stabilise the global oil market by offsetting concerns generated by wildfires in Canada and violence in Nigeria.

Global oil output rose to 32.7 million bpd in April.