The Strategist

IEA: Oil production in 2023 will exceed 100M tons

10/17/2022 - 03:13

The expectation for demand growth was revised as a result of OPEC+ countries' restrictions on oil production. According to the International Energy Agency's October forecast, oil consumption will rise by 1.9 million barrels per day (bpd) this year, which is 60,000 bpd less than anticipated in September.

The forecast states that demand will decline by 340 thousand bpd year over year in the fourth quarter of 2022. It might increase to 101.3 million bpd in 2023, up by 1.7 million bpd.

The IEA notes that the oil supply grew to 101.2 million bpd in September, up 300 thousand bpd. Beginning in November, OPEC+ nations will reduce the output cap by 2 million barrels per day. However, in October, its real volume will fall by 3.4 million below quotas.

The paper remarks production in the Russian Federation standing at 1.3 million barrels per day, Nigeria - at 870,000, and Kazakhstan - at 500,000. Therefore, the actual drop might be over 1 million bpd, and Saudi Arabia and the UAE will account for the majority of it. The IEA claims that the OPEC+ decision will prevent reserve increases in 2019. They do not anticipate that US shale output will make up for this decrease.

As a result, this year's global oil supply might increase by 4.6 million bpd above last year's level, reaching 99.9 million bpd, with OPEC+ nations contributing 3 million bpd of that expansion. US production will rise by 1.1 million barrels per day.