BAKU, Azerbaijan, Sept.9
By Leman Zeynalova - Trend:
The modest increase in non-OPEC production outside OPEC+ and delayed Iranian return leave room for the market to absorb the 2 mb/d hike from OPEC+ in H2, Trend reports with reference to the Oxford Institute of Energy Studies (OIES).
‘Global supply growth in 2021 is revised lower by 0.49 mb/d mainly due to weaker than expected historical data and a downgrade of Iranian production by 0.18 mb/d to 2.7 mb/d year-end. US production is also revised lower by 60,000 b/d to -0.16 mb/d y/y, with gains in H2 lowered by 0.14 mb/d. For 2022, global supply growth is upgraded by 0.1 mb/d due to higher non-OPEC growth (+70,000 b/d),” reads the OIES report.
The OPEC call in H2 2021 remains 0.77 mb/d below expected production, but in 2022 the outlook progressively builds into surpluses. OPEC+ supply management into next year remains crucial and the mechanisms set in place with the new deal (e.g., 3-month buffer, monthly meetings) could help support the market in 2022.
“In July, OPEC+ compliance remained strong at 108 percent. The actual OPEC+ barrels released back to the market in 2022 are likely to be less than the headline 5.76 mb/d figure of the agreement by some 1–1.2 mb/d,” said the OIES.
At the 20th OPEC and non-OPEC Ministerial Meeting (ONOMM), held Sept.1 2021, the sides reconfirmed the production adjustment plan and the monthly production adjustment mechanism approved at the 19th ONOMM and the decision to adjust upward the monthly overall production by 0.4 mb/d for the month of October 2021.
---
Follow the author on Twitter: @Lyaman_Zeyn