London, 11 December 2009

IEA monthly Oil Market Report: HIGHLIGHTS.

• Forecast global oil demand is virtually unchanged for 2009 at 84.9 mb/d but is revised up by 130 kb/d to 86.3 mb/d in 2010. Yearly growth (‐1.4 mb/d and +1.5 mb/d, respectively) remains driven by non‐ OECD countries, but OECD prospects have slightly improved.

• OECD industry stocks fell by 36 mb in October to 2,735 mb, 2.5% above 2008’s level. Middle distillates accounted for over 40% of the draw, yet global products in floating storage continued to rise in October and November. End‐October forward demand cover fell to 59.4 days, 2.5 days higher than a year ago.

• Global oil supply rose by 200 kb/d in November. OPEC crude production increased by 135 kb/d to 29.1 mb/d, its highest level in a year. Largely as a result of lower non‐OPEC supply prospects for 2010, next year’s call on OPEC is raised by 0.5 mb/d to 29.0 mb/d, compared with 28.7 mb/d in 2009.

• Forecast 2009 non‐OPEC supply is raised by 125 kb/d to 51.3 mb/d as Russian gas liquids output is revised up. In addition, the end of the quietest US hurricane season since 1997 has contributed to lift this year’s outlook. By contrast, 2010 supply is revised down by 265 kb/d to 51.6 mb/d, with North American supply now lower.

• Projected global 4Q09 refinery crude throughput is revised down by 0.6 mb/d to 72.3 mb/d, due to weaker US preliminary data and higher maintenance in Asia and the Middle East. Global 1Q10 crude throughput is seen rising by 1.0 mb/d year‐on‐year to 72.7 mb/d, but OECD crude runs are expected to fall given weak refining margins.

• Crude oil futures prices traded in a higher $75‐80/ bbl range in November before weakening in early December on fears that the recovery in the global economy could be shallower and slower than expected, especially in the key US market. Prices were trading at eightweek lows of around a $70‐74/bbl range at the time of writing.

• A medium‐term market update sees upward revisions for demand (largely non‐OECD Asia) outstripping those for supply (Russia, OPEC NGLs and Nigerian and Iraqi capacity). Yet higher OPEC capacity ensures similar market outlooks – tightening under the higher GDP case, but remaining comfortable under lower GDP growth or faster efficiency gains.

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