Baku, Azerbaijan, June 13
By Leman Zeynalova – Trend:
OPEC crude supply edged up 50,000 barrels per day in May to 31.69 million barrels per day, the International Energy Agency (IEA) said in its Oil Market Report.
“Higher flows from Saudi Arabia, Iraq and Algeria offset a fall in Nigeria and further declines in Venezuela. While the call on OPEC is set to ease in 2019, potential losses from Venezuela and Iran could require others to produce more,” said the IEA.
IEA estimates that global oil supply rose 276,000 barrels per day in May, to 98.7 million barrels per day, as non-OPEC output rose further to stand a hefty 2.2 million barrels per day above a year ago.
“As far as supply is concerned, we have revised upwards our estimate for 2018 non-OPEC production growth to 2 million barrels per day and in 2019 we will also see bumper growth, albeit slightly reduced, of 1.7 million barrels per day,” said the report.
“Our non-OPEC growth for 2019 includes a modest increase from Russia reflecting a possible contribution to compensating for lost production from Iran and Venezuela.”
IEA estimates that Middle East OPEC countries could increase production in fairly short order by about 1.1 million barrels per day and there could be more output from Russia on top of the increase already built into our 2019 non-OPEC supply numbers.
“However, even if the Iran/Venezuela supply gap is plugged, the market will be finely balanced next year, and vulnerable to prices rising higher in the event of further disruption. It is possible that the very small number of countries with spare capacity beyond what can be activated quickly will have to go the extra mile,” said the report.
In December 2016, at a meeting of oil producers in Vienna, 11 non-OPEC member countries agreed to cut oil production by a total of 558,000 barrels a day. The agreement was concluded for the first half of 2017 and was extended until the end of the first quarter of 2018 at a meeting on May 25, 2017.
At the last OPEC meeting in Vienna, the agreement was again extended until the end of 2018. Azerbaijan supported the decision.
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