BAKU, Azerbaijan, Jan.13
By Leman Zeynalova - Trend:
OPEC surplus crude oil production capacity, which averaged 2.5 million b/d in 2019, averaged 6.2 million b/d in 2020 (4.0 million b/d more than the 2010–19 average) and peaked during the third quarter of 2020 at 7.9 million b/d, the US Energy Information Administration (EIA) said in its January Short-term Energy Outlook (STEO), Trend reports.
EIA forecasts annual average surplus capacity to decline to 5.1 million b/d in 2021 and 4.1 million b/d in 2022.
“The fluctuations in surplus capacity are a direct result of crude oil production changes in response to the OPEC+ agreement. These estimates do not include additional capacity that may be available in Iran that is offline because of U.S. sanctions on Iran’s oil sales,” reads the report.
EIA estimates that OPEC production of other liquids declined to 5.0 million b/d on average in 2020, down from 5.4 million b/d in 2019. The 2020 production decrease was driven by less associated liquids output stemming from a reduction in crude oil production. EIA expects that this decline will reverse in tandem with OPEC+ production increases.
The OPEC+ production cuts in April 2020 (extended in June), along with record oil supply disruption levels, reversed the inventory builds that resulted from the historic demand declines during the second quarter of 2020. After global oil inventories built at an estimated rate of 7.5 million b/d during the second quarter of 2020, inventories declined during the second half of 2020. OPEC members’ high degree of compliance to the production cut agreement contributed to the falling inventories.
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