WTI Crude oil futures stayed supported today, breaking well above $ 70 per barrel to test its highest levels in four years. The market has not been hurt much by a downward revision in oil demand growth for second half of 2018. MCX Crude oil futures are also trading up 1% at Rs 4868 per barrel. According to a monthly update from the International Energy Agency (IEA), the global oil demand growth for 2018 has been revised slightly downwards from 1.5 mb/d to 1.4 mb/d. While recent data confirms strong growth in 1Q18 and the start of 2Q18, the IEA expects a slowdown in 2H18 largely attributable to higher oil prices. World oil demand is expected to average 99.2 mb/d in 2018.
Global refining throughput is on the rise with runs expected to hit a record 83 mb/d in July-August. Throughput growth, however, is not sufficient to cover all refined products demand, with stock draws expected to persist through 2Q18 and 3Q18. The agency noted further that the decision by the United States to withdraw from the Joint Comprehensive Plan of Action regulating Irans nuclear activities has switched the focus of oil market analysis from the fundamentals to geopolitics. In these early days, there is understandable uncertainty about its potential impact on Irans oil exports, which are currently about 2.4 mb/d.