That’s what J.P. Morgan analysts stated in a research note sent to Rigzone by the JPM Commodities Research team late Wednesday, highlighting that the figure marks a “200,000 barrel per day increase from the same period last year but … 600,000 barrels per day short of our estimates”.
“Despite an 800,000 barrel per day week over week improvement, total oil demand remains significantly below our published projections,” the analysts warned in the note.
“Year to date through September 18, global oil demand has grown by 1.1 million barrels per day, compared with our November forecast of a 1.5 million barrel per day increase,” they added.
In the note, the analysts stated that, following Typhoon Yagi, China was struck by Typhoon Bebinca on September 16 and is now preparing for Typhoon Pulasan. The latest typhoon is expected to impact the coastal economic hubs in the coming days, the analysts warned in the note.
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“As a result, transport and industrial activities in the region are likely to be disrupted, with daily domestic Chinese flights already averaging near their lowest volumes for the year,” they said.
“Further disruptions due to ongoing floods across Europe and Africa are also contributing to a downside risk for our September global oil demand forecast, with an annualized impact of 50,000 barrels per day,” they added.
The analysts stated in the note that global observable oil inventories were net flat during the second week of September, following a 32 million barrel build in the week prior.
“By split, visible crude stocks decreased by five million barrels, with a 22 million barrel draw in China being offset by increases in other regions,” they said.
“Meanwhile, inventories of oil products increased by five million barrels, largely driven by the United States,” they continued.
“Reported visible OECD commercial oil stocks (U.S., Europe, Japan, and Singapore) mirrored global stock movements, showing a slight two million barrel build in the second week of September,” the analysts went on to state.
“By split, crude oil inventories remained flat for the week, while oil products increased by two million barrels,” they said.
In a separate research note sent to Rigzone by the JPM Commodities Research team on September 12, analysts at J.P. Morgan said global oil demand averaged 102.2 million barrels per day through September 11, “recording a 100,000 barrel per day growth from year-ago levels but 0.9 million barrels per day below our estimates”.
In that note, the analysts said they “attribute this to typhoon Yagi in Asia and the approaching hurricane Francine in the U.S. Gulf Coast that have weighed on regional travel activities”.
An advisory posted on the National Oceanic and Atmospheric Association’s (NOAA) National Hurricane Center (NHC) website at 5pm CDT on September 11 stated that Francine had “made landfall in southern Louisiana in the Parish of Terrebonne, about 30 miles south-southwest of Morgan City, as a Category 2 hurricane”.
In the September 12 note, J.P. Morgan analysts highlighted that, year to date through the first week of September, global oil demand was tracking 1.13 million barrels per day growth compared with its November projections of a 1.5 million barrel per day gain. The analysts said in that note, however, that they “expect it to rebound as soon as the weather normalizes over the coming days”.
Global observable oil inventories built by 32 million barrels in the first week of September, erasing almost half of August’s observed draw of 79 million barrels, the analysts said in that note.
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“By split, visible crude stocks built by 21 million barrels, most of that in China, while inventories of oil products rose by 11 million barrels, eight million barrels of that in the United States,” they added.
“Reported visible OECD commercial oil stocks (U.S., Europe, Japan, and Singapore) followed global stock movements, building by 12 million barrels in the first week of September,” they continued.
In another note sent to Rigzone on September 5 by the JPM Commodities Research team, analysts at J.P. Morgan said global oil demand averaged 104.5 million barrels per day in August, “rising by 1.2 million barrels per day over year-ago levels and 100,000 barrels per day above our estimates”.
“Year to date, global oil demand is also tracking 1.2 million barrel per day growth compared with our November projections of a 1.7 million barrel per day gain,” the analysts stated in that research note.
“Our year-to-date growth was adjusted lower by 100,000 barrels per day due to upward revision of historical consumption data for the U.S. in 2023 and a slightly lower Chinese demand for 2024,” they added.
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