2018 might not be quite so happy for OPEC
On considering non-OPEC production, 2018 might not be quite so happy for OPEC producers, the International Energy Agency (IEA) said in its Monthly Oil Market Report.
IEA said that the flexibility and ingenuity of the shale sector raises challenges to forecasters. The agency has raised its annual growth forecast for total US crude oil to 390,000 barrels per day this year and 870,000 barrels per day for 2018.
“When our US outlook is added to expectations for the other producers, output from non-OPEC countries could rise by 1.6 million barrels per day (mb/d) in 2018, an increase of 0.2 mb/d to our forecast in last month's report,” said the agency.
So, on IEA’s current outlook 2018 may not necessarily be a happy New Year for those who would like to see a tighter market.
“Total supply growth could exceed demand growth: indeed, in the first half the surplus could be 200,000 b/d before reverting to a deficit of about 200,000 b/d in the second half, leaving 2018 as a whole showing a closely balanced market,” said the report.
IEA analysts believe that a lot could change in the next few months but it looks as if the producers' hopes for a happy New Year with de-stocking continuing into 2018 at the same 500,000 b/d pace we have seen in 2017 may not be fulfilled.