BAKU, Azerbaijan, Nov.12
By Leman Zeynalova – Trend:
Production from countries participating in the OPEC+ agreement held largely steady in October, Trend reports citing the International Energy Agency (IEA).
“Overall compliance was 103 percent. In November, world oil supply may rise by over 1 mb/d as the US recovers from hurricanes and Libya continues to bounce back. Output from producers outside of OPEC+ is set to fall by 1.3 mb/d in 2020 and rise by 0.2 mb/d next year. US supply falls by 600 kb/d in 2020 and by 655 kb/d in 2021.
With a Covid-19 vaccine unlikely to ride to the rescue of the global oil market for some time, the combination of weaker demand and rising oil supply provides a difficult backdrop to the meeting of OPEC+ countries due to take place on 1 December. Our current balances, incorporating the quota increase of 2 mb/d included in the OPEC+ supply agreement, imply almost zero stock change in the first quarter of 2021. Unless the fundamentals change, the task of re-balancing the market will make slow progress,” reads the report released by the IEA.
“In the short term, the poor outlook for demand and rising production in some countries; for example Libya (production has increased to 1 mb/d from only 0.1 mb/d in August), Iraq and the United States (recovering from hurricane disruptions), suggest that the current fundamentals are too weak to offer firm support to prices. Physical crude prices remain below futures and this is a signal that markets are well supplied. Observed oil stocks fell by only 0.8 mb/d in the third quarter against an implied draw of 2.1 mb/d. Lack of data transparency for some non-OECD countries partly explains the gap. We can see that OECD crude stocks in September are only 51 million barrels (4%) below their high point in May. Product stocks, following six consecutive months of builds, finally fell in September.”
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