Opec revises up forecast for 2018 oil supply from outside the group
- Author: Zachary Reyes Янв 19, 2018,
Янв 19, 2018, 17:59
In its monthly Oil Market Report for January released Friday morning, the International Energy Agency (IEA) said that global crude supplies fell by 4050,000 barrels per day in December to 97.7 million barrels per day. But the first week of 2018 saw production in the United States slipping from 9.782 million bpd in the last week of 2017, down to 9.492 million bpd.
"There's a slight turn in sentiment and a realization that non-OPEC production is going to grow strongly this year", said Caroline Bain, chief commodities economist at Capital Economics, on the oil market's shift downward. This suggests that shale could have a healthy growth this year.
Crude palm oil prices fell 0.75 per cent to Rs 555.70 per 10 kgs in futures trade today as participants booked profits at prevailing rates amid fall in demand at the spot market.
The bloc produced on averaged 32.42 million bpd in December, according to secondary sources, the report said.
"Tighter fundamentals are (the) main driver to the rally in prices, but geopolitical risk and currency moves along with speculative money in tandem have exacerbated the move", USA bank JPMorgan said in a note.
Increases in USA oil output are likely to form 80 percent of production worldwide by 2025, which will be equivalent to a boost in demand.
Such a prospect helped push prices - which last week climbed to a three year high above $64 a barrel - as low as $63.47 Thursday.
OPEC stated that higher oil prices has resulted to further supply to market, mainly in North America and particularly tight oil, including unconventional natural gas liquids (NGLs).
Crude production past year missed a target of about 200 million tons set by the National Energy Administration in February. For most of 2017, they were experiencing difficulties as global reserves remained high and prices low. To offset the American bonanza, OPEC and Russian Federation assembled a coalition of 24 nations that would cut their own production.
The producers will formally review their accord in June, and may start to wind it down in the second half of the year, Citi's Morse and SocGen's Wittner said. Russia's Energy Minister Alexander Novak said talks this weekend could include mechanisms for gradually exiting the supply cuts after the agreement concludes at the end of 2018, while also reaffirming its commitment to the agreement.
Oil prices were pulling back to even Wednesday after recent declines amid renewed threats for OPEC member Nigeria, but production trends are balancing the run.
Profit margins of companies which have crude and crude derivatives as their significant raw material components, the prices of which are linked to the market price, could see some contraction.
In the meantime, the pressure to change strategy is likely to ease in coming weeks as oil prices retreat, the two banks predict.