Non-OPEC Supply, Oil Demand Are Exceeding Expectations: Vitol

Global oil markets are expected to be fairly balanced, with a slight surplus next year as demand and non-OPEC supply growth are exceeding expectations, the global head of research at Vitol, Giovanni Serio, said.

• Oil demand globally has exceeded 2019 levels and is expected to continue growing as oil intensity - the volume of oil consumed per unit of GDP - for most economies has returned to pre-pandemic levels except in the United States, Serio said.
• "Demand is at 2.3mbpd higher than 2019 and the Saudis have to give a lollipop producing at 9mbpd to balance the market," Serio said. Demand has exceeded expectations, he added.
• The monthly oil market reports from the IEA, EIA and OPEC also surprised this month with an upward revision in demand forecasts for this year and partly also for next year, despite bearish market sentiment towards demand.
• Production growth from non-OPEC countries has exceeded previous highs and continues to grow, while Nigerian output has also surpassed expectations, Serio added.
• Supply needs to be constrained at a level that is only marginally higher than the level of Saudi production during COVID-19, he added.
• The refining sector is "experiencing a potentially last growth spurt" and could go through a soft patch next year, but capacity could tighten again in 2028-2035 amid low investments, Serio said.
• On refined fuels, Serio said it is premature to say gasoline demand in China has peaked as sales of gasoline cars are still holding at steady levels and China’s gasoline car fleet is still expected to grow next year, he added.