IEA lowers global crude oil production forecast by over 60%
THE International Energy Agency (IEA) expects crude oil production growth in 2015 to be 350,000 barrels per day, lower than previously expected 950,000 barrels per day.
Though, supply will still grow significantly in 2015, it would however, not as much as previously thought, the agency said in its monthly report released recently.
The world’s top energy watchdog also signaled a potential recovery in the price of crude as it anticipates a slowdown in production growth outside the Organisation of the Petroleum Exporting Countries (OPEC) cartel.
The agency scaled back its expectation for supply growth outside OPEC by 350,000 barrels per day (bpd). It now expects non-OPEC countries to produce 950,000 bpd this year, bringing total production excluding the cartel to 57.5m bpd in 2015.
“How low the market’s floor will be is anybody’s guess. But the sell-off is having an impact. A price recovery – barring any major disruption – may not be imminent, but signs are mounting that the tide will turn,” the IEA said in the report.
The agency, which represents the world’s largest energy-consuming nations, said that it expected a slowdown in oil output growth from non-OPEC producers, which in turn would help to ease the global glut in crude.
Macroeconomic weakness continues to restrain global oil demand growth, the IEA Oil Market Report (OMR) for January told subscribers, with fourth quarter 2014 deliveries estimated just 0.6 million barrels per day (mbpd) above year-earlier levels.
Despite lower prices, with Brent crude futures near a six-year low, demand growth is forecast to accelerate only 0.9 mbpd in 2015, unchanged from the outlook in the December report.
The oil selloff has cut expectations of 2015 non-OPEC supply growth by 350 000 barrels per day (350 kb/d) since last month, to 950 kbpd. Effects on North American supply are so far limited to 95 kb/d and 80 kbpd to the Canadian and US forecasts, respectively. Projections are cut by 175 kb/d for Colombia and 30 kbpd for Russia.
OPEC output rose by 80 kbpd in December to 30.48 mbpd, as Iraqi supply surged to 35-year highs, offsetting deeper losses in Libya. Downward revisions to the non-OPEC supply outlook raise the “call” on OPEC for the second half of 2015 to an average 29.8 mbpd – just shy of OPEC’s official target of 30 mbpd.
Global refinery crude throughputs surged to a record high of 78.9 mb/d in December, lifting the fourth quarter 2014 estimate to 78.2 mbpd. But throughputs are forecast to ease seasonally to 77.8 mb/d in the current quarter amid brimming product inventories, weakening margins, lower demand and increased refinery maintenance.
The January OMR also provided a special focus on the surge in Iraqi output as well as informed subscribers about recent developments in Chinese and Singaporean stocks and how widening contango has renewed interest in floating storage. Learn about the recent upgrade of the OMR, which now offers interactive tables, improved search and much more.