Global oil production to outpace demand

Oil&Gas Materials 15 December 2021 13:45 (UTC +04:00)
Global oil production to outpace demand

BAKU, Azerbaijan, Dec.15

By Leman Zeynalova – Trend:

Global oil production is poised to outpace demand starting from December, as the US and OPEC+ led by Saudi and Russia ramp up more and provide relief to a tight oil market, Trend reports with reference to the International Energy Agency (IEA).

“As this upward supply trend extends into 2022, the US, Canada and Brazil look set to pump at their highest ever annual levels next year. Saudi Arabia and Russia could also smash yearly records, but that depends entirely upon a full unwinding of remaining OPEC+ cuts. In that case, global supply would rise by a massive 6.4 mb/d next year compared with an increase of 1.5 mb/d in 2021, with OPEC+ output alone up by 4.6 mb/d versus a gain of 1 mb/d in 2021. Production from outside the producer alliance (non-OPEC+) is forecast to expand by 1.8 mb/d in 2022 after an increase of 450 kb/d in 2021, with the US accounting for 56 percent of the growth,” reads the latest IEA report.

The agency notes that a substantial boost is on the way in December, with world supply nearing 99 mb/d to stand 6.2 mb/d up y-o-y.

“The US is expected to deliver a third straight month of significant gains in December. If Saudi Arabia and Russia increase in line with allocated OPEC+ targets, each will pump over 10 mb/d of crude, the highest since April 2020. The steady rise in supply, combined with easing demand, has considerably loosened our balances for 1Q22 compared to last month’s Report. We expect OPEC+ to pump 1.7 mb/d above the call on its crude (versus a previous 1.1 mb/d), provided it continues to unwind its cuts and assuming Iran remains under sanctions. By 2Q22, OPEC+ crude oil output could rise to 2 mb/d above the call,” the report says.


Follow the author on Twitter: @Lyaman_Zeyn