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The second quarter of this year may bring a shortage of supply on the world oil market, states the IEA paper. According to the agency’s forecast, OPEC oil production will remain at the same level throughout 2018. The IEA says OPEC oil production in February fell by 70 thousand barrels per day, to 32.1 million barrels per day. As a result of January, the excess of commercial oil and oil products in the OECD countries, compared with their average five-year value, amounted to 53 million barrels. At the same time, a small deficit of oil products appeared. However, in monthly terms, stocks rose (for the first time since July) by 18 million barrels, to 2.871 billion barrels. It is also noteworthy that, according to the IEA, oil reserves in the largest US terminal in Cushing have fallen to the lowest values in the past three years.
Taking into account this factor, commercial reserves will be growing slightly in the first quarter, and there will be a deficit for the rest of the year, the report says.
"Meanwhile, the oil market rebalancing continues; key indicators, such as supply and demand, are becoming increasingly equal, and commercial oil and oil products in OECD countries are increasingly falling to average statistical values," the IEA also notes.
Venezuela can become the key country that will push the market to a deficit of oil. Its extraction "demonstrates a clear trend towards an accelerated fall". In February, Venezuela's output fell by another 60,000 barrels per day. "If supplies from other producers do not compensate it, then this Latin American country may be the last element that will strongly push the market to a deficit," the agency said in its monthly report.
In addition, among the countries with unstable production, the IEA marks Libya and, to a lesser extent, Nigeria. "In Libya, we saw another modest increase in supply in February to 1.02 million barrels per day and although we cannot yet talk about stability, it seems that the frequency and severity of production interruptions are declining, and the growth rates of production remain", - IEA notes.
At the same time, oil production in the US in 2018 may exceed 11 million barrels per day, which is 1.3 million barrels higher than the level of 2017.
One of the shale basins, namely, Permian, will be the main growth driver, although limited pipeline capacity may slow the growth rate during the second half of the year, until new facilities are delivered in 2019. Other factors, such as the shortage of sand used in fracturing (shale oil production technology) and manpower, can also slow production growth, but only after 2018.
In general, according to the agency, OPEC countries in February fulfilled a plan to limit oil production by 147% - the production level was 32.1 million barrels per day.
source: iea.org
Taking into account this factor, commercial reserves will be growing slightly in the first quarter, and there will be a deficit for the rest of the year, the report says.
"Meanwhile, the oil market rebalancing continues; key indicators, such as supply and demand, are becoming increasingly equal, and commercial oil and oil products in OECD countries are increasingly falling to average statistical values," the IEA also notes.
Venezuela can become the key country that will push the market to a deficit of oil. Its extraction "demonstrates a clear trend towards an accelerated fall". In February, Venezuela's output fell by another 60,000 barrels per day. "If supplies from other producers do not compensate it, then this Latin American country may be the last element that will strongly push the market to a deficit," the agency said in its monthly report.
In addition, among the countries with unstable production, the IEA marks Libya and, to a lesser extent, Nigeria. "In Libya, we saw another modest increase in supply in February to 1.02 million barrels per day and although we cannot yet talk about stability, it seems that the frequency and severity of production interruptions are declining, and the growth rates of production remain", - IEA notes.
At the same time, oil production in the US in 2018 may exceed 11 million barrels per day, which is 1.3 million barrels higher than the level of 2017.
One of the shale basins, namely, Permian, will be the main growth driver, although limited pipeline capacity may slow the growth rate during the second half of the year, until new facilities are delivered in 2019. Other factors, such as the shortage of sand used in fracturing (shale oil production technology) and manpower, can also slow production growth, but only after 2018.
In general, according to the agency, OPEC countries in February fulfilled a plan to limit oil production by 147% - the production level was 32.1 million barrels per day.
source: iea.org
