The Organization of Petroleum Exporting Countries raised its production forecast for non-OPEC oil output, particularly from US unconventional plays for 2017-18.
The cartel also said its November oil production, as estimated by secondary sources, averaged 32.45 million b/d, a drop of about 133,000 b/d from October. Nigeria’s oil production increased but it was offset by declining production in Angola, Saudi Arabia, Venezuela, and the UAE.
OPEC cut its estimate of world demand for OPEC crude in 2018 by 270,000 b/d to 33.15 million b/d.
In its Monthly Oil Market Report, OPEC forecast non-OPEC oil supply growth for 2017 at 810,000 b/d, which was up by 150,000 b/d from OPEC’s previous forecasts.
For 2018, OPEC forecast non-OPEC growth at 990,000 b/d, revised higher by 120,000 b/d.
“Higher-than-expected supply growth in US, Canada, and Kazakhstan have been the key contributors to the upward revisions, particularly US tight oil,” OPEC said. “The momentum seen this year is expected to continue in 2018 on the back of increased investment in US tight oil and improved well efficiency.”
The 2018 forecast for non-OPEC supply is “associated with considerable uncertainties” particularly regarding US tight oil developments, the cartel said.
Higher Canadian production, particularly from already sanctioned oil sands projects, also will contribute to 2018 supply growth, OPEC said.
Meanwhile, production-cut targets by OPEC and others are expected to reduce world oil supplies but are taking effect slowly, the report said. On Nov. 30, OPEC, Russia, and several other non-OPEC producers agreed to extend their production-cut targets for 9 months until yearend 2018.
“This should lead to a further reduction in excess global inventories, arriving at a balanced market by late 2018,” OPEC said.
Contact Paula Dittrick at [email protected].
