Global oil inventories

The EIA expects global oil inventory builds to average 1.3 MMbbl/d[1. Million barrels per day.] in 1H 2015. These builds will later moderate in the second half of the year as non-OPEC supply, particularly in the US, slows due to low prices and as demand rises.

The EIA Expects Liquid Fuels Supply to Growth More Slowly in 2015

Non‐OPEC petroleum and other liquids supply

The EIA estimates that non-OPEC production grew by 2.2 MMbbls/d in 2014. This growth was led by the US. In 2015, the EIA expects supply to grow much more slowly, by 1 MMbbl/d, and then by 0.6 MMbbl/d in 2016, because of lower oil prices. The slower growth is due mostly to slow production growth in the US.

OPEC petroleum and other liquids supply

According to EIA estimates, OPEC crude oil production averaged 30.1 million bpd[2. Barrels per day.] in 2014. Non-crude liquids averaged 6.4 million bpd in 2014. The EIA expects OPEC crude production to remain flat in 2015 and then decline by 0.3 million bpd in 2016. Non-crude liquids production should increase by fewer than 0.1 million bpd in both 2015 and 2016.

Oil prices affect the margins of oil producers like Chevron (CVX), Murphy Oil (MUR), Hess (APA), and Continental Resources (CLR). CVX, HES, and MUR are part of the iShares Global Energy ETF (IXC), and they make up ~9% of the ETF.

Global supply forecasts

The EIA expects global petroleum and liquids production to exceed demand. Total world supply should average 94 MMbbl/d in 2015, per the EIA. The total supply was 93 MMbbl/d in 2014.

Demand forecasts

According to the EIA, global consumption averaged 92.2 MMbbl/d in 2014. In 2015, the EIA expects global consumption to grow by 1 MMbbl/d, to 93.2 MMbbl/d, and by another 1 MMbbl/d in 2016, to 94.2 MMbbl/d.

See Market Realist’s Energy and Power page for the latest updates on the energy sector.

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