Crude oil glut easing, OPEC says
Print Edition
OPEC yesterday said a global crude glut that has squeezed the market and sent prices plunging over the past year “may be easing” as a result of countries outside the oil producing cartel dropping their production.
“There have been consistent signs of declines in non-OPEC production which should likely flip the global oil market into a net deficit in 2017,” the Organization of the Petroleum Exporting Countries said in its May report.
Non-OPEC countries are expected to lower their crude supply by 740,000 barrels per day to average 56.4 million bpd.
The drop is mainly based on “lower expectations for crude oil production from China, Brazil, India and Vietnam, which outweighs total upward revisions in the UK and Russia,” the cartel said.
Global production levels are also down because of the declining number of drilling rigs and the closure of high-cost facilities in the United States, it said.
The forecast mirrored that of the International Energy Agency, which said on Thursday that the worldwide oversupply is set to “shrink dramatically” later this year.
Despite its more positive market outlook, OPEC warned that at this stage “nothing has fundamentally changed as the oversupply remains and global oil inventories are at record highs.”
While demand for OPEC oil is projected at 31.5 million bpd, the cartel’s output averaged 32.44 million bpd in April — an increase of 188,000 bpd.
The rise was in part driven by Iran, which rejoined the market in January after international sanctions were lifted following a landmark nuclear deal with world powers last year. Tehran has repeatedly insisted that it will not slow down production until it has reached pre-sanctions levels of 4 million bpd.
In April, Iran pumped an additional 200,000 bpd compared with last month, generating a total of 3.45 million bpd.
In the past, the 13-nation OPEC traditionally cut back on production to support prices. But cartel kingpin Saudi Arabia this time changed tack by stepping up output to defend market share and push out higher-price producers like US shale oil companies.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
