OPEC MOMR (May): 2021 oil demand growth forecast unchanged M/M; refinery margins weakened further in Asia but increased in Europe and US Gulf Coast

Link

DEMAND

• 2021 global oil demand forecast unchanged from the prior month


• Slower than anticipated demand in OECD Americas during 1Q21, together with the resurgence of COVID-19 cases in India and Brazil, caused the 1H21 oil demand data to be revised downwards


• However, positive transportation fuel data from the US, and acceleration in vaccination programmes in many regions provides further optimism in 2H21.


• The assumed return to some degree of normality and improved mobility is also expected to positively affect regions such as the Middle East and Other Asia in 2H21.


• Although the market structure of all three major oil benchmarks – ICE Brent, NYMEX WTI and DME Oman – remained in sustained backwardation, lower seasonal crude demand in Europe and Asia, the deteriorating COVID-19 situation in several countries, and expectation of higher supplies in the coming months lessened the backwardation in the key markets, suggesting that the supply-demand balance is softening.

SUPPLY

• Total OPEC-13 crude oil production averaged 25.08mln in April 2021, up by 300k BPD M/M. Crude oil output increased mainly in Nigeria, IR Iran and Saudi Arabia, while production decreased primarily in Venezuela, Libya and Angola.


• The share of OPEC crude oil in total global production was up by 0.1% in April to 27.0% compared with the previous month.


• Non-OPEC liquids production (including OPEC NGLs) decreased in April by 180k BPD compared with the previous month

REFINERY MARGINS

• In Asia, margins weakened further, with most of the pressure coming from the bottom of the barrel, although crude processing rates in the region remained relatively constrained.


• Refinery margins in Europe increased and showed the strongest positive response compared to the other key regions as gasoline crack spreads continued to soar, reaching the highest level recorded since October 2019.


• US Gulf Coast refining margins increased slightly as support derived from exports and further improvements in domestic mobility indicators helped support product markets.

Analysis details (12:20)

• All-in-all, the report does not provide any groundbreaking nor fresh takeaways, with the findings in-line with COVID situations in the respective regions

11 May 2021 - 12:20- EnergyGeopolitical- Source: OPEC