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Opec has revised higher its output growth figures from producers outside of the cartel for this year and next, saying production — particularly from US shale fields — presented “considerable uncertainties” for the oil market.
The group’s research arm said in its monthly oil market report that non-Opec oil supply growth for 2017 now stands at 810,000 barrels a day, an upward revision of 150,000 b/d from prior forecasts.
For 2018, Opec estimates non-Opec growth at 990,000 b/d, which has been revised higher by 120,000 b/d.
“Higher-than-expected supply growth in the US, Canada and Kazakhstan have been the key contributors to the upward revisions, particularly US tight oil,” said Opec. “The momentum seen this year is expected to continue in 2018 on the back of increased investment in US tight oil and improved well efficiency.”
The 2018 forecast for non-Opec supply is “associated with considerable uncertainties” particularly regarding US tight oil developments, said Opec.
The performance of US shale oil producers and others outside of the cartel is in focus as supply cuts led by Opec and countries such as Russia have been extended for the duration of 2018.
Ahead of a Vienna meeting of oil ministers, Russia pushed for guidance on when a winding down of supply curbs will take place, as oil companies in the country expressed concern about US shale producers taking advantage of a price rebound in 2017.
Opec kingpin Saudi Arabia has said it is “premature” to discuss an exit strategy as global inventories still remain above their five year average, meaning producers still had more work to do to ease bloated stockpiles.
Opec said crude from its members will stand at 33.2m b/d in 2018, which is higher than levels seen in 2017 and slightly higher than what the cartel expects demand for its crude to stand at next year. In November production stood at almost 32.5m b/d.
Still, it said “continued efforts by OPEC and non-OPEC to support oil market stability…should lead to a further reduction in excess global inventories, arriving at a balanced market by late 2018”.
Global oil demand is projected to grow at 1.5m b/d in 2017, in line with last month’s forecast, and by a similar level next year.