Nigeria, Saudi Arabia, others buoy OPEC oil supply


OPEC Secretariat, Viena, Austria.

OPEC Secretariat, Viena, Austria.

. IEA predicts global petroleum consumption to grow by 1.3 mbpd in 2016

Nigeria, Saudi Arabia and Kuwait have been identified as the main nation’s that buoyed the crude oil output from the Organisation of Petroleum Exporting Countries (OPEC) last month.

Besides, the United States Energy Information Administration (EIA) expects global consumption of petroleum and other liquids to grow by 1.2 million bpd in 2015 and by 1.3 million bpd in 2016.

OPEC, in its latest Monthly Oil Market report for September, obtained by The Guardian, also noted that Iraq and Angola recorded the largest drop in the period under review.

The cartel also reviewed downward the world oil demand growth in 2016 by 50,000 barrels per day (bpd) due to the projected slower economic movement in Latin America and China.

Specifically, the world oil demand growth in 2016 is now anticipated at 1.29 million bpd, leading to total global consumption of around 94.08 million bpd.

The 2015 world oil demand currently stands at 1.46 million bpd, leading to total global consumption of 92.79 million bpd.

Besides, OPEC oil supply is expected to increase slightly by 0.16 million bpd, a downward revision of 110,000 bpd from the previous report.

The report stressed that crude oil output increased mostly from Nigeria, Saudi Arabia and Kuwait, while production in Iraq and Angola showed the largest drop. According to secondary sources, OPEC crude oil production, not including Iraq, stood at 27.48 million bpd in August, up by 99,000 over the previous month.

Africa’s oil supply is projected decline by 50,000 bpd to average 2.34 million bpd in 2016 year-on-year, unchanged from the previous report.

In 2016, oil production from Congo is expected to grow, while others forecast to decline, with exception of South Africa, which should remain steady.

On quarterly basis, Africa’s oil supply in 2016 will average 2.35 million bpd, 2.34 million bpd, 2.33 million bpd and2.32 million bpd respectively.

Meanwhile, the EIA, in its Short Term Energy Outlook, stated that growth in global consumption for 2016 was revised downward by almost 0.2 million bpd, compared with last month’s forecast, as China and other Asian economies continue to show signs of weakness.

It added that world real gross domestic product (GDP) weighted for oil consumption increased by 2.8 per cent in 2014, and is projected to grow by 2.3 per cent in 2015 and by 2.9 per cent in 2016.

EIA disclosed that consumption of petroleum and other liquids in countries outside of the Organization for Economic Cooperation and Development (OECD) grew by 1.4 million bpd in 2014 and is projected to grow by 0.7 million bpd in 2015 and by 1.1 million bpd in 2016.

Despite signs of slowing economic growth, EIA said that China continues to be a driver of non-OECD oil consumption growth. China’s growth in oil consumption is expected to average slightly less than 0.3 million bpd in 2015 and 2016, below the 0.4 million bpd growth in 2014.

Also, Iran is expected to experience an uptick in economic activity and petroleum consumption in 2016, assuming implementation of the Joint Comprehensive Plan of Action (JCPOA) between Iran and the P5+1 that was announced on July 14.

“After falling by 0.3 million bpd in 2014, OECD petroleum and other liquids consumption is expected to rise by 0.4 million bpd in 2015 and by 0.3 million bpd in 2016, reaching an average of 46.4 million bpd, the highest annual average level of OECD consumption since 2010. U.S. consumption is expected to grow by an average of 0.3 million bpd in 2015 and by 0.1 million bpd in 2016. Several European countries saw economic conditions improve as they emerged from recessions, which, combined with colder-than-normal weather early in 2015 across Europe, contributes to a projected 0.1 million bpd increase in consumption in OECD Europe in 2015”, it added.

EIA estimates that OPEC crude oil production averaged 30.1 million bpd in 2014, unchanged from 2013.

It added that crude oil production declines in Libya, Angola, Algeria, and Kuwait offset production growth in Iraq and Iran. EIA forecasts OPEC crude oil production to increase by 0.8 million bpd in 2015 and remain relatively flat in 2016. “Iraq is expected to be the largest contributor to OPEC production growth in 2015. In 2016, additional OPEC crude oil supply is expected to come from Iran, which is forecast to boost production if international sanctions targeting its oil sector are suspended”.

EIA stated: “On July 14, the P5+1 and Iran announced an agreement that could result in relief from United States and European Union nuclear-related sanctions (which include some oil-related sanctions). Sanctions relief is contingent on verification by the International Atomic Energy Agency that Iran has complied with key nuclear-related steps. The sanctions relief would put additional Iranian oil supplies on a global market that has already seen oil inventories increase significantly over the past year.

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1 Comment
  • Fuzio

    Nigeria needs to restructure her economy away from over dependence on Oil revenue. No amount of OPEC manipulation will save the country from the frequent budget upheavals as a result of crude oil price shocks.