Analysts: OPEC production to further rise

Analysts: OPEC production to further rise

Baku, Azerbaijan, Nov. 6

By Aygun Badalova - Trend:

OPEC production will further rise despite the low oil prices, analysts believe.

"Considering the market dynamics we currently forecast, OPEC production is expected to increase from 32 million barrels per day in 4Q2015 to a seasonal peak of 32.6 million barrels per day in 3Q2016, and average 32.2 million barrels per day next year," analysts of the US JP Morgan bank said in a report obtained by Trend.

Current OPEC production is approaching 32 million barrels per day, largely driven by growth in production from the MEG3 (Middle East Gulf trio) plus the resurgent Iraq, analysts said. Conversely, Atlantic Basin OPEC producers are languishing with African and Latin American production down yyear over year.

Despite this increase since 2011, Middle Eastern producers still hold 2.1 million barrels per day spare capacity largely concentrated in Saudi Arabia reflecting the disparity in spare capacity within OPEC members, according to the analysts.

They believe that the further OPEC production growth will be driven by the return of Iranian supply (+300,000 barrels per day year over year) and marginal growth in Iraq and Saudi Arabia.

There is potential for some additional supply from the UAE, analysts believe.

Total OPEC crude oil production increased by 0.11 million barrels per day to average 31.57 million barrels per day in September, according to OPEC's latest Oil Market Report. Crude oil output increased mostly in Iraq, Nigeria and UAE, while production in Saudi Arabia showed the largest drop of 48,000 barrels pre day.

The report says that the demand for OPEC crude in 2015 is estimated to stand at 29.6 million barrels per day, 0.6 million barrels per day above the previous year's level. In 2016, demand for OPEC crude is forecast at 30.8 million barrels per day, around 1.2 million barrels per day higher than the current year.

JP Morgan's forecasts for OPEC crude oil production by member states (in bbl/d)

Country

4Q15

1Q16

2Q16

3Q16

4Q16

Algeria

1.1

1.1

1.1

1.0

1.0

Angola/Cabinda

1.8

1.8

1.8

1.8

1.7

Ecuador

0.5

0.5

0.5

0.5

0.5

Iran

2.9

3.1

3.2

3.2

3.2

Iraq

4.3

4.3

4.4

4.4

4.3

Kuwait

2.8

2.8

2.8

2.8

2.8

Libya

0.4

0.5

0.5

0.5

0.5

Nigeria

1.9

1.9

1.9

1.9

1.9

Qatar

0.7

0.7

0.7

0.7

0.7

Saudi Arabia

10.3

10.2

10.4

10.6

10.4

UAE

2.9

2.9

2.9

2.8

2.8

Venezuela

2.4

2.4

2.3

2.4

2.4

Total

32

32.1

32.3

32.5

32.1

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