Baku, Azerbaijan, Jan.5
By Leman Zeynalova – Trend:
Prospects for 2018 oil market are rather bullish but there is a big question mark, Francis Perrin, Senior Fellow at the OCP Policy Center (Rabat) and Senior Research Fellow at the French Institute for International and Strategic Affairs (IRIS, Paris), told Trend.
He pointed out that non-OPEC oil supply will increase this year as it was the case in 2017.
“In fact this increase will be more important in 2018 than last year. Once more the US will be the main driver with a rise in its national production of more than 1 million barrels per day. This increase is the main obstacle this year to the rebalancing of the world oil market to which OPEC and several non-OPEC countries have significantly contributed since the end of 2016,” added the expert.
On the other hand, Perrin noted that oil prices are now at their highest level since December 2014.
“Apart from the situation in Iran, the recent closure of the Forties pipeline in the North Sea (it was reopened at the beginning of 2018), an attack against a pipeline in Libya and a severe winter in several OECD (Organization for Economic Co-operation and Development) countries there are other factors explaining the rise in world oil prices. World economic growth is solid; oil demand is increasing; emerging and developing countries need more and more oil; OPEC has reduced its output in 2017 and these cuts have been extended until the end of 2018; ten non-OPEC countries, including Russia and Azerbaijan, are cooperating with OPEC; and crude and refined products stocks in OECD countries are being reduced. The oil market is near a state of balance between supply and demand,” he concluded.
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