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The OPEC Monthly Oil Market Report (MOMR) for March released Tuesday provides OPEC's outlook for crude oil market developments for the coming year with key developments impacting oil market trends in world oil demand and supply.

MOMR Oil market highlights
- OPEC Raises world oil demand growth est for 2016 by 50 tb/d to 1.38 mb/d to average 95.05 mb/d.
- Raises non-OPEC demand forecast to 400kbpd vs 240kbpd
- US output forecast revised up to 100kbpd on a rebound in shale
- Oil market to start balancing or see an inventory drawdown H2 2017
- 11 members cut output to 26.681mbpd, 123kbpd over target
- OPEC secondary sources say output fell 140kbpd to 31.958mbpd
- Saudis say raised output to 10.011mbpd vs 9.748mbpd but still below OPEC target

Oil market highlights

Crude Oil Price Movements
The OPEC Reference Basket rose in February for the third consecutive month, ending up about 2% to average
$53.37/b. Crude futures, traded in a relatively narrow range for the second month in a row. High compliance with
supply adjustments by OPEC and some non-OPEC producers supported gains. In the crude futures markets,
ICE Brent ended 1% higher to average $56/b in February and NYMEX WTI increased 1.6% to $53.46/b. The
Brent-WTI spread narrowed at $2.53/b, which is supporting arbitrage economics to the US. Speculative activity hit
a fresh record high for the third month in a row, providing additional support to oil prices.

World Economy
Global economic growth expectations remain at 3.0% in 2016 and 3.2% in 2017. OECD growth in 2017 is
unchanged at 1.9%, with growth in US, Euro-zone and Japan seeing no revisions. China is expected to grow by
6.2% in 2017, unchanged from the previous report. India is now expected to see a slight deceleration, following a
marginal downward revision to 7.0% in 2017. Russia’s 2017 growth remains at 1.0%, while the forecast for Brazil
was revised slightly higher to 0.5%.

World Oil Demand
The world oil demand growth estimate for 2016 was revised marginally higher by around 50 tb/d to now show
growth of 1.38 mb/d to average 95.05 mb/d. Revisions were driven primarily by higher-than-anticipated 4Q16 oil
demand in OECD Europe, and Asia Pacific, as well as China, partially offset by minor downward adjustments in
the Middle East. For 2017, oil demand growth is anticipated to be around 1.26 mb/d, higher by 70 tb/d from
previous month projections, to average 96.31 mb/d. The upward adjustments were due to more optimistic
expectations for oil demand in OECD Europe, as well as Asia Pacific

World Oil Supply
Non-OPEC oil supply growth is estimated to show a contraction of 0.66 mb/d in 2016, in line with the previous
report, to average 57.34 mb/d. Higher 4Q16 growth in Canada and Other OECD Europe was offset by downward
revisions in the US, Norway, Australia, Brunei and Azerbaijan. In 2017, non-OPEC oil supply is projected to grow
by 0.40 mb/d, following an upward revision of 0.16 mb/d to average 57.74 mb/d. An improving outlook for
Canadian oil sands and US supply were the main contributors to the revision. OPEC NGLs production in 2017
was revised down by 20 tb/d to now show growth of 0.13 mb/d. In February, OPEC production decreased by
0.14 mb/d, according to secondary sources, to average 31.96 mb/d.

Product Markets and Refining Operations
Product markets exhibited a mixed performance in the Atlantic Basin. Higher export opportunities for gasoline and
strong middle distillates demand supported the European market, while margins fell in the US due to the
weakening seen at the top and bottom of the barrels. Meanwhile, refinery margins in Asia continued to be healthy
ahead of the spring refinery maintenance season, despite a slight fall due to some bearish signals in the gasoline
market.

Tanker Market
Dirty tanker spot freight rates declined in February, with rates falling for all vessels on all reported routes. Lower
freight rates were registered on the back of limited activity, the Chinese New Year holidays in the East and fleet
expansions. VLCC, Suezmax and Aframax rates declined 21% on average from a month before.

Stock Movements
OECD commercial oil stocks rose in January to stand at 3,006 mb. At this level, OECD commercial oil stocks
were 278 mb above the five-year average. Crude and products showed a surplus of around 209 mb and 69 mb
above the seasonal norm respectively. In terms of days of forward cover, OECD commercial stocks stood at
63.8 days, some 4.9 days higher than the five-year average.

Balance of Supply and Demand
Demand for OPEC crude in 2016 stands at 31.6 mb/d, some 1.9 mb/d higher than in the previous year. For 2017,
demand for OPEC crude is projected at 32.4 mb/d, around 0.7 mb/d higher than in the current year.

Complete Report
OPEC News Release 14 March 2017 .

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