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USA crude oil production increases: weekly report

22 January, 2019, 00:10 | Author: Sara Gill
  • Lease Operator Jon Pearson checks well pressure on a lease owned by Parsley Energy in the Permian Basin near Midland

The Organization of the Petroleum Exporting Countries (OPEC) in its monthly market report cut its forecast for the average demand for its crude in 2019 to 30.83 million bpd, down 910,000 bpd from the 2018 average.

During the 4th OPEC and non-OPEC Ministerial Meeting, an agreement was reached to increase oil production by one million barrels per day.

USA oil prices settled higher on Wednesday. They pledged to lower output by 1.2 million bpd, of which OPEC's share is 800,000 bpd.

He recalled that world oil prices fell between 2013 and 2016 (four consecutive years) and rose in 2017 and 2018 (annual averages).

They were above that mark in November, figures in OPEC's report showed.

Saudi Arabia has said its output will decline even further this month as the kingdom attempts to avoid an accumulation of excess oil inventories.

OPEC member countries and 10 non-OPEC producers agreed to cut supplies by 1.2 mb/d from January 1 for six months, based on October 2018 levels at the OPEC/non-OPEC ministerial meeting in Vienna on December 7, 2018.

Crude prices remain nearly 30 percent below the four-year peak reached in October amid concerns over economic growth in China and the US, the world's two biggest oil users, who remain locked in a trade dispute.

Barkindo added that he remains optimistic that "healthy demand" would hold this year.

World oil markets have been on a rollercoaster ride in recent months, with OPEC and its partners including Russian Federation, often called OPEC+, agreeing to cut back production again from January in order to reverse a slump in oil prices on abundant production and worries about slower global growth. We expect bunker prices may turn into the phase of irregular changes next week. It is expected, that during the current period of the cuts, until June 2019, OPEC and allies will remove a total of 1.195 million bpd off the market and keep production at 43.874 million bpd.

The biggest drop in OPEC supply last month came from Saudi Arabia and amounted to 468,000 bpd, the report showed. The production controls first agreed two years ago are an "adaptable toolkit" that has allowed the group to flex output to respond to potential over-supply risks or consumer concerns that demand may be outpacing supply, he said.

Continuously rising USA shale production will make the United States a net exporter of crude oil and petroleum products in the fourth quarter of 2020, the EIA said in its January Short-Term Energy Outlook (STEO), which offered a first glimpse into the administration's forecasts for 2020.

Iran, Libya and Venezuela are exempt from the 2019 supply pact and are expected by some analysts to post further falls, giving a tailwind to the voluntary effort by the others.

For now, IEA retains its view that demand growth in 2018 was 1.3 mb/d, and this year it will be slightly higher at 1.4 mb/d, mainly due to average prices being below year-ago levels. Last month's report had pointed to a surplus.



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