BAKU, Azerbaijan, Jan. 15
By Leman Zeynalova – Trend:
The US Energy Information Administration (EIA) assumes that OPEC will limit production through all of 2020 and 2021 to target relatively balanced global oil markets, Trend reports citing EIA Short-Term Energy Outlook (STEO).
As a result of production restraint from most OPEC members and continuing production declines in Iran and Venezuela, EIA expects OPEC production will fall in 2020. EIA forecasts that OPEC crude oil production will average 29.2 million b/d in 2020, down 0.6 million b/d from 2019. In 2021, forecast OPEC crude oil production increases by 0.1 million b/d.
EIA estimates that Venezuela’s crude oil production for 2019 averaged 0.8 million b/d. EIA expects Venezuela’s production will continue recent trends and fall through the forecast period—albeit at a slower overall rate of decline—while the financial situation of the stateowned Petróleos de Venezuela (PdVSA) remains extremely precarious.
“Venezuela, which relies heavily on oil revenues, has seen its cash income severely constricted because only about half of its crude oil exports generate cash revenues. The rest is used for in-kind loan payments to China, which become less valuable with lower global oil prices. Venezuela’s oil revenue is also reduced by ongoing payments to ConocoPhillips following an arbitration agreement about its seized assets and to holders of PdVSA’s 2020 bonds,” reads the report.
EIA expects that OPEC surplus crude oil production capacity, which averaged 2.0 million b/d in 2019, will increase to 2.4 million b/d in 2020 and then to 2.5 million b/d in 2021. This estimate does not include additional capacity that may be available in Iran but is offline because of US sanctions on Iran’s oil sales.
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