OPEC sees 'more balanced' oil market in 2016 as non-OPEC supply
slows
London (Platts)--13Jul2015/722 am EDT/1122 GMT
OPEC expects a "more balanced market" next year with world oil demand
growth set to outpace growth in non-OPEC supply, and the call on OPEC
crude set to climb above 30 million b/d next year for the first time on
an annual basis since 2013, the oil producer group said Monday.
In its latest monthly oil market report, OPEC said it expects non-OPEC
oil supply to average 57.69 million b/d in 2016, representing a growth
slowdown to 300,000 b/d from 860,000 b/d in 2015.
An expected improvement in the global economy next year should translate
into higher oil consumption, OPEC said, forecasting that oil demand will
grow by 1.34 million b/d to average 93.94 million b/d next year.
OPEC calculates the call on its crude, plus movements in and out of
stocks, as the difference between world oil demand (93.94 million b/d)
and total non-OPEC supply, including natural gas liquids produced by
OPEC members (63.87 million b/d).
This leaves the call on OPEC at 30.07 million b/d in 2016 -- a
projected increase of close to 900,000 b/d over the current year, in
which demand for OPEC crude is expected to climb by more than 200,000
b/d to 29.21 million b/d.
"This would imply an improvement towards a more balanced market.
Better-than-expected momentum in the global economy, especially in the
emerging markets, would contribute further to oil demand growth in the
coming year," OPEC said.
PUMPING MORE
OPEC is already pumping far more than the expected level of demand for
its crude next year, estimating its 12 members collectively pumped 31.38
million b/d in June.
The group's production has been climbing in recent months following the
Saudi Arabia-driven decision last November not to respond to collapsing
oil prices by cutting output -- and thus losing further market share to
non-OPEC producers -- but instead to maintain the official ceiling of 30
million b/d that has been in place since January 2012.
Ministers retained the ceiling again at their early June meeting.
There are no quotas under the official ceiling, so there is no mechanism
to enforce compliance.
But it seems unlikely that rising output will cause undue concern to
OPEC kingpin Saudi Arabia, which told the group's Vienna secretariat
that its own production had climbed to a record 10.564 million b/d in
June.
OPEC uses secondary sources rather than the figures directly
submitted by member countries to monitor its output, however, and the
secondary source-derived estimate for Saudi Arabia is considerably lower
at 10.235 million b/d.
The kingdom's own figures show that Saudi crude production has increased
by some 880,000 b/d since the start of this year.
But Iraq, now OPEC's second-biggest producer, has also boosted output
significantly, adding some 549,000 b/d of production since January,
according to its own official figures.
These additions have come alongside international negotiations on Iran's
nuclear program that are expected to conclude later Monday in a historic
deal that could see increased flows of Iranian oil onto world markets in
coming months.
So while OPEC continues to compete with non-OPEC producers for market
share, a secondary level of competition is at play within OPEC's own
ranks.
--Margaret McQuaile,
margaret.mcquaile@platts.com
--Edited by Jeremy Lovell,
jeremy.lovell@platts.com
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