BAKU, Azerbaijan, June 16
By Leman Zeynalova - Trend:
After tumbling by 7.2 million barrels per day (mb/d) in 2020, global oil output is set for a modest 1.7 mb/d recovery in 2021, assuming OPEC+ cuts ease, Norway, Brazil and Guyana deliver solid gains and Libya manages to sustain a rebound, Trend reports citing the International Energy Agency (IEA).
IEA’s Oil Market Report shows that global oil supply plunged by 11.8 mb/d in May, driven by a record OPEC+ cut and economic shut-ins in the US, Canada and elsewhere.
“US supply is poised to fall by 0.9 mb/d in 2020 and a further 0.3 mb/d next year unless higher prices unlock fresh investments in the shale patch. Global oil supply is set to tumble by a massive 7.2 mb/d on average in 2020, and stage only a 1.8 mb/d increase in 2021 assuming 100 percent compliance with OPEC+ cuts,” reads the report.
The recent improvement in oil prices that saw WTI trading for a few days close to $40/bbl is not enough to allow a significant increase in US output, which in June is estimated to have fallen to 10.5 mb/d, down by 2.4 mb/d from a record high seen in November, said the IEA.
“In the meantime, high crude and product stocks will limit the scope for producers in many countries to sell more to refiners. In the case of the US, data from the Energy Information Administration show that commercial stocks of crude oil and products have increased by about 1 mb/d since the start of the year and are at an all-time record high,” the report says.
IEA believes that in sporting terms, the 2020 oil market is now close to the half time mark.
“So far, initiatives in the form of the OPEC+ agreement and the meeting of G20 energy ministers have made a major contribution to restoring stability to the market. If recent trends in production are maintained and demand does recover, the market will be on a more stable footing by the end of the second half. However we should not underestimate the enormous uncertainties.”
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