Baku, Azerbaijan, March 13
By Leman Zeynalova – Trend:
OPEC+ oil output cuts will remain in place through end-2019, Trend reports citing the March Short-Term Energy Outlook (STEO) of the US Energy Information Administration (EIA).
Notwithstanding the strong draw in February, EIA forecasts that global liquid fuels inventories will rise by 0.2 million b/d in 2019 and by 0.4 million b/d in 2020.
The March STEO’s expected inventory builds in both years are lower than the forecast in last month’s STEO.
The lower forecast inventory builds reflect lower expected crude oil production in both OPEC and the United States.
“Saudi Arabia cut crude oil production by more than expected in February, with production averaging 10 million b/d, and EIA assumes that joint OPEC/non-OPEC crude oil production cuts will remain in place through the end of 2019,” reads the report.
In addition, the US active oil rig count reached a 10-month low of 834 rigs as of March 8, suggesting the rate of US crude oil production growth could slow, according to EIA.
“Even though US crude oil production is estimated to have remained near 11.9 million b/d for the past four months, EIA still forecasts US crude oil production to increase by 1.3 million b/d in 2019 and by 0.7 million b/d in 2020,” said the report.
OPEC and US production levels, as well as the pace of global oil demand growth, present considerable uncertainty to oil market balances and price expectations, said EIA.
Based on the current forecast, however, EIA expects global inventory builds and rising OPEC spare capacity will limit significant upward oil price pressures in 2019 and in 2020.
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.
---
Follow the author on Twitter: @Lyaman_Zeyn