IEA revises up forecast for non-OPEC crude output
Baku, Azerbaijan, May 16
By Leman Zeynalova – Trend:
The International Energy Agency’s (IEA) overall outlook for the non-OPEC countries, eleven of which are voluntarily cutting production to support OPEC, shows growth in 2017 of nearly 600,000 barrels per day, an increase on the 490,000 barrels per day seen in last month's report.
“Looking at the second quarter of 2017, if we assume that April's OPEC crude oil production level of 31.8 million barrels per day is maintained, and nothing changes elsewhere in the balance, there is an implied stock draw of 0.7 million barrels per day,” said the report.
Adopting the same scenario approach for the second half of 2017, the stock draws are likely to be even greater, the IEA experts believe.
“Even if this turns out to be the case, stocks at the end of 2017 might not have fallen to the five-year average, suggesting that much work remains to be done in the second half of 2017 to drain them further,” said the report.
Moreover, in line with stronger recent performance from the US shale sector, the IEA has revised upwards its expectation throughout 2017 and expects total US crude production to exit the year 790,000 barrels per day higher than at the end of 2016, which is an upward revision of 100,000 barrels per day since last month's report.
“While compliance with the agreed production cuts by OPEC and the eleven non-OPEC countries has generally been strong, we need to keep a close eye on Libya and Nigeria where there are signs that production might be rising sustainably,” said the report. “According to preliminary data, Libyan production reached 800 kb/d in May, the highest level since 2014, and any significant increase clearly offsets cutbacks by other OPEC and non-OPEC countries.”
Follow the author on Twitter: @Lyaman_Zeyn