Oil - 2015 in review

Dated Brent averaged $52.39 per barrel in 2015, a decline of $46.56 per barrel from the 2014 level and the lowest annual average since 2004

Prices

Crude oil prices rose in early 2015 as global consumption rebounded and US production began to register month-on-month declines. But strong growth in OPEC production, particularly in Iraq and Saudi Arabia, caused prices to fall sharply later in the year. The Brent - WTI differential narrowed for a third consecutive year, to $3.68 per barrel.

Consumption and production

Expanded coverage

Country coverage of refinery throughput and capacity has been expanded. The oil trade tables now break out China and Russia and provide the split of crude oil and oil products for inter-area movements.

Global oil consumption grew by 1.9 million barrels per day (b/d), or 1.9% - nearly double the recent historical average (+1%) and significantly stronger than the increase of 1.1 million b/d seen in 2014. The relative strength of consumption was driven by the OECD countries, where consumption increased by 510,000 b/d (+1.1%), compared with an average decline of 1.1% over the past decade. Growth was well above recent historical averages in the US (+1.6%, or 290,000 b/d) and the EU (+1.5%, or 200,000 b/d), while Japan (-3.9%, or -160,000 b/d) recorded the largest decline in oil consumption. Outside of the OECD, net oil importing countries recorded significant increases: China (+6.3%, or +770,000 b/d) once again accounted for the largest increment to demand, while India (+8.1%, or 310,000 b/d) surpassed Japan as the world’s third-largest oil consumer. But this was offset by slower growth in oil producers, such that oil demand growth in the non-OECD as a whole (+2.6%, or 1.4 million b/d) was below its recent historical average.

Global oil production increased even more rapidly than consumption for a second consecutive year, rising by 2.8 million b/d or 3.2%, the strongest growth since 2004. Production in Iraq (+750,000 b/d) and Saudi Arabia (+510,000 b/d) rose to record levels, driving an increase in OPEC production of 1.6 million b/d to 38.2 million b/d, exceeding the previous record reached in 2012. Production outside OPEC slowed from last year’s record growth but still grew by 1.3 million b/d. The US (+1 million b/d) had the world’s largest annual growth increment and remained the world’s largest oil producer. Elsewhere, production growth in Brazil (+180,000 b/d), Russia (+140,000 b/d), the UK and Canada (+110,000 b/d each) was offset by declines in Mexico (-200,000 b/d, the world’s largest decline), Yemen (-100,000 b/d) and elsewhere.

Refining and trade

Global crude runs rose by 1.8 million b/d (+2.3%), more than triple their 10-year average growth, despite declines in South & Central America, Africa and Russia. Strong refining margins lifted crude runs by 1 million b/d in the OECD, with growth in Europe (+740,000 b/d) the highest since 1986. In contrast, global refining capacity grew by only 450,000 b/d, the smallest increase in 23 years. Delayed expansion in China, combined with closures in Taiwan and Australia, resulted in a fall in Asian capacity for the first time since 1988. Global refinery utilization rose by 1 percentage point to 82.1%, the fastest increase in five years.

After barely growing in 2014, global trade of crude oil and refined products expanded by 3 million b/d (+5.2%) last year, the largest increase since 1993. Crude oil trade was lifted by growing exports from the Middle East (+550,000 b/d), while Europe and China accounted for the largest increases in imports (+770,000 b/d and +530,000 b/d respectively). Growth in refined product exports was again led by the US (+470,000 b/d); the country’s net oil imports fell to 4.8 million b/d, the lowest since 1985.

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