OPEC’s crude oil production dropped to a six-month low in November, while U.S. and other non-OPEC supply has grown stronger than initially expected this year, which prompted the cartel to revise up on Wednesday its estimates for non-OPEC supply growth in 2018.
OPEC’s crude oil production fell by 133,500 bpd from October to stand at 32.448 million bpd in November, OPEC’s Monthly Oil Market Report showed on Wednesday. This was the lowest production the cartel has reported in six months.
The largest increase among the members came from Nigeria, whose production in November jumped by 95,800 bpd from October to 1.790 million bpd, according to OPEC’s secondary sources. Angola, Saudi Arabia, Venezuela, and the UAE saw the largest declines in production.
The final OPEC monthly report for this year focused on the 2017 highlights and expectations for 2018. In both overviews, the predominant theme was the U.S. shale supply growth that was higher than any initial expectations.
“Non-OPEC oil supply growth 2017 performed well above initial market expectations to now stand at 0.81 mb/d. Higher-than-expected supply growth in the US, Canada and Kazakhstan have been the key contributors to the upward revisions, particularly US tight oil. As a result, US oil output is now expected to grow at 0.61 mb/d this year,” OPEC said.
The expected non-OPEC oil supply growth for 2017 is an upward revision of 150,000 barrels per day from the previous report.
Improved well efficiency and increased investment in U.S. tight oil prompted OPEC to expect the momentum to continue in 2018. Higher production from sanctioned oil sands projects in Canada will also add to increased non-OPEC supply next year.
“As a result, non-OPEC supply is expected to grow by 0.99 mb/d in 2018. The forecast is associated with considerable uncertainties, particularly regarding US tight oil developments,” OPEC said.
For 2018, OPEC revised up its forecast for non-OPEC supply growth by 120,000 barrels per day.
In its World Oil Outlook 2017 published in November, OPEC admitted that higher oil prices, robust oil demand growth, and higher upstream activity will lead to faster-than-previously-expected growth in U.S. shale production until 2022.
“Combined with continued efforts by OPEC and non-OPEC to support oil market stability, this should lead to a further reduction in excess global inventories, arriving at a balanced market by late 2018,” the cartel said today.
