Oil prices under threat from demand pressures in coming months: IEA

The global oil market is currently well supplied but growing demand
pressures and ongoing disruptions in some OPEC producing countries could soon
reverse a recent spate of softer oil prices, the International Energy Agency
said Thursday.
     In its latest monthly oil market report, the IEA also raised its
estimates for world oil demand growth this year and warned that oil demand is
poised for a seasonal increase in the coming months.
     "For now global oil markets seem well supplied," the IEA said. "(But) if
seasonal cycles in crude and product demand are any guide, the recent easing
of prices may be relatively short-lived."
     Noting a softening in global oil prices since September, the IEA
said that the impact of surging North American production and sharply lower
refining runs may soon be reversed. Front-month Brent crude was trading under
$108/b earlier Thursday, a fall of more than $8/b since recent September
highs. In New York, NYMEX crude futures was trading about $93.50/b, close to
$17/b lower than in early September.
     End-user demand is now on the verge of a seasonal ramp-up, and refinery
crude throughputs are poised for a "steep" rebound in November and December,
the IEA said.
     "Meanwhile production problems in Libya and Iraq, among others,
continue to relentlessly fester, and may prove more market-supportive in a
context of rising demand than they have been during the recent season," the
IEA said.
     The IEA raised its global oil demand growth estimate by 45,000 b/d to 91
million b/d for 2013 to reflect signs of higher-than-expected oil product
deliveries, particularly in Europe. It said several countries accounted for
adjustments to demand figures for August, led by Chinese Taipei, the UK,
Turkey and Belgium.
     As a result, the 2013 demand growth forecast was also raised by 50,000
b/d to 1 million b/d.
     For 2014, global oil consumption is expected to average 92.1 million b/d
in 2014, little changed from last month's report, but the forecast growth rate
was trimmed by a marginal 30,000 b/d to 1.1 million b/d, the IEA said.

     RECORD NON-OPEC SUPPLY
     The IEA said global supplies in October rose 600,000 b/d to 91.8 million
b/d, with a surge in non-OPEC output only partially offset by lower OPEC
production.
     Helped by booming US shale output, non-OPEC supplies in October jumped
month on month by 740,000 b/d to reach a record 55.53 million b/d, the IEA
said.  
     On Wednesday, the US Energy Information Administration said the country's
domestic production in October exceeded its imported crude for the first time
in 18 years, hitting 7.7 million b/d.
    Including biofuels, the US is estimated to have already surpassed Russia
as the world's biggest non-OPEC liquids producer and the IEA believes the US
will replace Saudi Arabia as the world's biggest oil producer in 2015.
     Based on the latest production data, the IEA raised its non-OPEC supply
growth estimate for 2013 by 100,000 b/d 1.3 million b/d. The 2014 forecast was
increased slightly to 1.8 million b/d.
     OPEC crude oil supply in October fell for the third month running, down
105,000 b/d at 29.89 million b/d, with Saudi cutbacks leading the downturn.
     Saudi Arabia's oil production averaged 9.75 million b/d in October, down
370,000 b/d from the previous month and below the 10 million b/d mark for the
first time in three months, the IEA said.
     As a result of the lower production, the IEA estimated OPEC's effective
spare capacity at 3.32 million b/d in October compared with 2.90 million b/d
in September.
     Iraqi crude oil output partially recovered in October, up 150,000 b/d at
2.97 million b/d, but the IEA noted that worsening security problems in recent
weeks will likely hit output this month.
     Meanwhile ongoing security related setbacks in Libya and Nigeria are
continuing to hamper output from the OPEC producers.
     Libyan oil production was estimated to have growth by 150,000 b/d to
average 450,000 b/d in October but fell again to 250,000 b/d in early November
amid worsening political turmoil and labor disputes, the IEA said. Nigerian
output was estimated to have fallen slightly in October, down 55,000 b/d to
1.99 million b/d.
     The IEA also noted that OPEC ministers are expected to maintain their
formal 30 million b/d production ceiling originally agreed in January 2012
when they meet next week in Vienna.
   
     OIL STOCKS RISING
     The IEA said its "call" on OPEC crude was unchanged for the fourth
quarter and full-year 2013, at 29.6 million b/d and 30 million b/d,
respectively. The call for the first quarter of 2014 was also unchanged at
28.6 million b/d, which is 1.4 million b/d below the group's output target.
     On stocks, the IEA said OECD stocks rose counter-seasonally by 8.6
million barrels in September, reversing August's draw, to end the month at
2.67 billion barrels.
     The build was in contrast to the 15.5 million-barrel five-year average
draw for the month, the IEA said. Preliminary data points to a 7.6
million-barrels draw in total October oil inventories, weaker than the 16.0
million-barrel five-year average draw for the month, on the back of plunging
refined product inventories.
     The IEA also cut its forecast for Q4 global refinery crude by 555,000
b/d on "plummeting" European crude throughputs. Weak margins and seasonal
plant maintenance slashed European crude runs in October taking runs to their
lowest level since April 1989, the IEA said.
     European crude runs sank to 11.3 million b/d in September, their lowest
level since April 1991, the IEA said, noting the level was also some 1.1
million b/d below year-earlier levels.
     Preliminary data for the US, Japan and Europe suggest OECD runs slumped
by a further 1.3 million b/d in October, it said.
    Global refining throughputs for Q4 are now projected at 76.7 million b/d,
up 0.4 million b/d year on year