OPEC raises forecast on 2018 non-member oil supply

The Organization of Petroleum Exporting Countries (OPEC) revised upwards its 2018 crude oil supply outlook for both member and non-member producers, while also raising its estimates on demand growth this year, OPEC’s latest monthly oil market report showed.

The non-OPEC supply increase is expected to be driven by higher output coming mainly from the United States.

The group raised 2018 non-OPEC supply forecast by 10,000 barrels per day (bpd), estimating a growth by 1.72 million bpd year-on-year (YoY) to average 59.62 million bpd, compared to last month’s assessment.

Nearly 89 percent of the growth is expected in the US, while Canada, Brazil, the UK and Kazakhstan are also anticipated to see an increase, the report said.

“The outlier in this investment story is the US tight oil industry, which saw investment rise by more than 42 percent YoY in 2017, at about $138 billion, with H2 2017 seeing greater expansion as crude oil prices continued to gain,” OPEC said.

OPEC NGLs and non-conventional liquids production in 2018 is forecast to grow by 180,000 bpd YoY, to average 6.49 million bpd.

In April, OPEC crude oil production increased by 12,000 bpd, to average 31.93 million bpd, according to secondary sources.

Based on reports from secondary sources, Saudi Arabia’s output had the maximum increase output in April – rising 46,500 bpd to average 9.96 million bpd.

Direct communication, however, showed Saudi Arabia cutting output by 39,000 bpd to average 9.87 million bpd in April.

Crude oil production decreased mainly in Venezuela, Gabon and Nigeria, the report said.

World oil demand growth in 2018 is forecast to increase by around 1.65 million bpd to average 98.85 million bpd. Growth was revised higher by 25,000 bpd, compared with last month’s assessment.

China is anticipated to lead oil demand growth in 2018, followed by other Asia and OECD Americas, the report said.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com