It would not be until the second half of next year that it won’t result in demand exceeding supply, while speeding up the re-balancing of the global oil market, OPEC said its agreement to cut production.
OPEC said in its monthly report on Wednesday that the reduction of global inventories and bring forward the re-balancing of the oil market to the second half of 2017 would be accelerated by the Dec. 10 agreement between the Organization of Petroleum Exporting Countries and non-members such as Russia and Kazakhstan. On Tuesday, the International Energy Agency indicated a supply deficit in the first half in its report published on Tuesday and OPEC’s Wednesday report is a more pessimistic outlook than the IEA.
As it seeks to end a three-year glut that the group admits lasted longer than it expected, oil prices have climbed about 16 percent since OPEC announced its first production cuts in eight years on Nov. 30. When 11 non-members signed up as well, the accord was widened on Dec. 10.
The organization slightly increased forecasts for supplies from outside OPEC in 2017 despite a commitment from those countries to lower their output in the first half by 600,000 barrels a day. The six months covered by the deal is estimated to limit production in Russia, which pledged half of the non-OPEC cut, and in Kazakhstan, which also agreed to cut, and would remain steady for the period. The report doesn’t state whether the estimates take into account the most recent agreement.
According to the report, produced by the bloc’s Vienna-based secretariat, “due to higher price expectations for 2017,” the non-OPEC growth forecast was increased by about 100,000 barrels a day, to 300,000 a day. The forecasts for U.S. supply in 2017 was kept unchanged by the organization.
As Nigeria and Libya -- which are both exempt from any obligation to cut -- restored some of their disrupted supplies, the group said that its own output climbed 150,800 barrels a day to 33.87 million a day in November. This implies that the other nations would need to make deeper cuts than originally agreed in order to meet the group’s target of 32.5 million barrels a day.
The group’s revision of October output levels, which were used as the reference points for the accord, could become another reason for complication for the deal by the group. Noting a level that was higher than its reference level of 10.54 million, the assessment made by the organization about production in Saudi Arabia, the biggest and most influential member, was at 10.56 million barrels a day in October.
To ensure compliance with the agreement, comprising of three members and two non-members, the organization has created a monitoring committee.
A discrepancy with the group’s own estimates were continued to be reflected in the production data that was submitted directly by members, which is also included in the report. This month’s report showed a wider disparity for Saudi Arabia even as data from Iraq, Iran and Venezuela have regularly differed. The kingdom told OPEC it produced 10.72 million barrels a day in November, about 200,000 a day more than OPEC’s own assessment.
(Source:www.bloombrg.com)
OPEC said in its monthly report on Wednesday that the reduction of global inventories and bring forward the re-balancing of the oil market to the second half of 2017 would be accelerated by the Dec. 10 agreement between the Organization of Petroleum Exporting Countries and non-members such as Russia and Kazakhstan. On Tuesday, the International Energy Agency indicated a supply deficit in the first half in its report published on Tuesday and OPEC’s Wednesday report is a more pessimistic outlook than the IEA.
As it seeks to end a three-year glut that the group admits lasted longer than it expected, oil prices have climbed about 16 percent since OPEC announced its first production cuts in eight years on Nov. 30. When 11 non-members signed up as well, the accord was widened on Dec. 10.
The organization slightly increased forecasts for supplies from outside OPEC in 2017 despite a commitment from those countries to lower their output in the first half by 600,000 barrels a day. The six months covered by the deal is estimated to limit production in Russia, which pledged half of the non-OPEC cut, and in Kazakhstan, which also agreed to cut, and would remain steady for the period. The report doesn’t state whether the estimates take into account the most recent agreement.
According to the report, produced by the bloc’s Vienna-based secretariat, “due to higher price expectations for 2017,” the non-OPEC growth forecast was increased by about 100,000 barrels a day, to 300,000 a day. The forecasts for U.S. supply in 2017 was kept unchanged by the organization.
As Nigeria and Libya -- which are both exempt from any obligation to cut -- restored some of their disrupted supplies, the group said that its own output climbed 150,800 barrels a day to 33.87 million a day in November. This implies that the other nations would need to make deeper cuts than originally agreed in order to meet the group’s target of 32.5 million barrels a day.
The group’s revision of October output levels, which were used as the reference points for the accord, could become another reason for complication for the deal by the group. Noting a level that was higher than its reference level of 10.54 million, the assessment made by the organization about production in Saudi Arabia, the biggest and most influential member, was at 10.56 million barrels a day in October.
To ensure compliance with the agreement, comprising of three members and two non-members, the organization has created a monitoring committee.
A discrepancy with the group’s own estimates were continued to be reflected in the production data that was submitted directly by members, which is also included in the report. This month’s report showed a wider disparity for Saudi Arabia even as data from Iraq, Iran and Venezuela have regularly differed. The kingdom told OPEC it produced 10.72 million barrels a day in November, about 200,000 a day more than OPEC’s own assessment.
(Source:www.bloombrg.com)
