EIA: OPEC will limit production through all of 2020
BAKU, Azerbaijan, Dec.11
By Leman Zeynalova – Trend:
The US Energy Information Administration expects that OPEC will limit its oil production through all of 2020, not only during the period until March, Trend reports referring to the EIA December Short-term Energy Outlook (STEO).
On December 6, the Organization of the Petroleum Exporting Countries (OPEC) and a group of other oil producers announced they were deepening production cuts originally announced in December 2018. The group is now targeting production that is 1.7 million barrels per day (b/d) lower than in October 2018, compared with the former target reduction of 1.2 million b/d. OPEC announced that the cuts would be in effect through the end of March 2020. However, EIA assumes that OPEC will limit production through all of 2020, amid a forecast of rising oil inventories. EIA forecasts OPEC crude oil production will average 29.3 million b/d in 2020, down by 0.5 million b/d from 2019.
EIA assumes the production cuts from OPEC and Russia will remain in place through the end of the forecast period in 2020. With production restraint from most OPEC members, continuing sanctions on Iran, and ongoing declines in Venezuela’s crude oil production, EIA expects OPEC production to fall in 2020. However, EIA forecasts that increased non-OPEC production will more than offset those declines and that global liquid fuels supply will rise by 1.5 million barrels per day (b/d) in 2020.
In late 2018, OPEC and a number of countries outside this organization (OPEC+ format) decided to modernize the terms of the agreement on the reduction of oil production, in force from the beginning of 2017. The countries agreed to reduce the total production by 1.2 million barrels per day from the level of October 2018.
On July 2, 2019, a decision was made in Vienna to extend the agreement on reducing oil production by OPEC member and non-member states until the end of the first quarter of 2020.
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