2-3 million barrel per day swing in oil supply and demand balance crushed the oil price

Global oil supply inched up by 35 kb/d in October to 94.2 mb/d. Compared with one year ago, total supply was 2.7 mb/d higher as higher OPEC production added to non-OPEC supply growth of 1.8 mb/d. Non-OPEC production growth is forecast to ease to 1.3 mb/d for 2015 from this year’s 1.8 mb/d high.

Global oil demand estimates for 2014 and 2015 are unchanged since last month’s Report, at 92.4 mb/d and 93.6 mb/d, respectively. Projected growth will increase from a five-year annual low of 680 kb/d in 2014 to an estimated 1.1 mb/d next year as the macroeconomic backdrop is expected to improve.

Developed world demand (US, Europe, Japan and rest of OECD) is down or flat because of slow growth or recession. China and the developing world oil demand growth has slowed. The increase of a few million barrels per day in supply exceeded the growth in demand.

China and the other national economies were all trying to have more GDP growth but each quarter they fell short. Meanwhile producers drilled and pumped oil to make millions and billions of dollars.