INTERACTIVE: OPEC revises down global oil supply estimates for 2017

LONDON (ICIS)–OPEC has revised down its non-OPEC 2017 global oil supply estimates as a result of lower-than-expected US output in the first quarter of the year, as well as lower output from Russia, Brunei, the Sudans and Kazakhstan, the Austria-headquartered cartel said on Thursday.

Growth in output in both the UK and Canada were offset by the lower output from Russia, Brunei, the Sudans and Kazakhstan, while US oil supply growth was revised down by 30,000 bbl/day as Q1 output was lower than expected, according to OPEC’s latest Monthly Oil Market Report.

However, the report also stated that non-OPEC supply is expected to increase by 0.5m bbl/day in the second half of the year, compared with the first. “The US is the main driver behind this higher growth, contributing 0.76 mb/d followed by Brazil and Canada with 0.12 mb/d and 0.06 mb/d, respectively,” said OPEC.

“On a country-by-country basis, the main contributors to growth in 2017 are expected to be the US with 0.80 mb/d, Canada with 0.26 mb/d, Brazil with 0.21 mb/d and Kazakhstan with 0.13 mb/d. In contrast, Mexico and China, as per 2016, remain the countries that see the largest contractions.”

OPEC maintained its projections for oil demand growth, forecasting a growth of 1.27m bbl/day to average 96.38m bbl/day.

“Total OECD demand is expected to grow again by 0.23m bbl/day but at lower pace growth compared to 2016. Non-OECD oil demand will continue to grow by 1.04m bbl/day. Total oil consumption in 2017 is anticipated to be around 96.3m bbl/day,” the report said.

Elsewhere, the OPEC reference basket fell 4.2% in May to average $49.20/bbl as crude futures continued to tumble off the back of the continuing upward trend in US output outweighing OPEC and non-OPEC production cuts.

“Month-on-month, the two main oil futures tumbled more than 4.5% to their lowest value since November 2016, given the plentiful supplies and despite the OPEC and non-OPEC decision. Eight consecutive weeks of US crude oil inventories draws, albeit at a slow pace, also failed to support oil futures.

“ICE Brent ended $2.42 lower in May, a drop of 4.5% to stand at $51.40/bbl, while NYMEX WTI plunged $2.58 or 5%, to stand at $48.54/bbl.”

In 2017, OPEC natural gas liquids and non-conventional liquids are projected to average 6.22m bbl/day, which is unchanged from last month’s report and represents a growth of 0.17m bbl/day year on year.

The cartel revised up its forecast for global economic growth from 3.3% to 3.4% in 2017 after stronger-than-anticipated growth momentum since the beginning of the year.

“The recent growth dynamic in the global economy has been confirmed with the exception of potentially temporary dips in the US and India.”

Interactive graph by Sophie Udubasceanu.