Baku, Azerbaijan, Dec.13
By Leman Zeynalova – Trend:
Non-OPEC oil supply is expected to grow by 2.5 million barrels per day (mb/d) in 2018, Trend reports citing OPEC’s Monthly Oil Market Report (MOMR).
“Non-OPEC oil supply growth in 2018 was revised up by 0.19 mb/d from the previous MOMR, and is now estimated to grow by 2.50 mb/d to average 60.03 mb/d, mainly due to upward revisions in historical US and Canada production data, as well as a higher supply forecast for 4Q18 by 0.50 mb/d mainly for Russia,” said the cartel.
The report shows that the expected y-o-y growth of 2.13 mb/d in the US with higher production from Canada, Russia, Kazakhstan, the UK and Ghana will support non-OPEC supply growth in 2018, while Mexico, Norway and Vietnam will show the largest declines.
This is while non-OPEC oil supply growth in 2019 revised down by 0.08 mb/d to average 2.16 mb/d, due to a mandatory production adjustment in Alberta, and Russia, as a result of the new decision made at the fifth Meeting of the OPEC and Non-OPEC Ministerial Conference in December.
“Absolute supply is now forecast to reach an average of 62.19 mb/d. The US, Brazil, Russia and the UK are the main drivers for next year’s growth also supported by Canada, Ghana, Australia and Kazakhstan, while Mexico, Norway, Indonesia, Vietnam and Egypt are projected to see the largest declines,” the report reads.
OPEC said that the 2019 non-OPEC supply forecast is faced with many challenges, including changes in the intensity of drilling and completion in the US shale industry, bottlenecks in the transportation of oil in the Permian Basin, Western Canada and even in the Williston Basin in North Dakota, as well as the realization of final investment decisions (FIDs) regarding projects in other non-OPEC countries.
OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
The 5th OPEC and non-OPEC Ministerial Meeting was held in Vienna, Austria, on December 7, 2018.
The meeting participants decided to adjust the overall production by 1.2 million barrels per day, effective as of January 2019 for an initial period of six months. The contributions from OPEC and the voluntary contributions from non-OPEC participating countries of the ‘Declaration of Cooperation’ will correspond to 0.8 million barrels per day (2.5 percent), and 0.4 million barrels per day (2 percent), respectively.
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