OPEC sees shale oil rising in 2018, hikes supply forecast

The Organization of Petroleum Exporting Countries (OPEC) on Thursday said it expects non-OPEC supply to grow at a faster pace in 2018 than its earlier estimates, mainly due higher-than-expected supply forecast for the US, Canada, Mexico and the UK.

The group revised upwards its estimates on year-on-year supply growth by 161,000 barrels per day (bpd) to average 1.15 million bpd in 2018, according to OPEC’s latest monthly oil market.

A non-OPEC total supply of 58.94 million bpd is expected in 2018.

“Higher oil prices are bringing more supply to the market, particularly in North America and specifically tight oil, including unconventional NGLs (natural gas liquids),” the report said.

OPEC NGLs and non-conventional liquids supply growth, meanwhile, is expected to be around 0.18 million bpd to average 6.49 million bpd in 2018, driven by higher production in Iran and Saudi Arabia.

In December 2017, OPEC crude oil production increased by 42,000 bpd, according to secondary sources, to average 32.42 million bpd, the report said.

Crude oil output increased in Nigeria, Angola and Algeria, while production declined in Venezuela.

Based on secondary sources, Saudi Arabia cut its output by 10,900 bpd in December to 9.91 million bpd. According to direct communication, the Kingdom’s production rose 89,300 bpd in December to 9.98 million bpd.

Meanwhile, OPEC kept its estimates on 2018 global oil demand growth at 1.53 million barrels per day (bpd) – unchanged from December report. The world oil consumption is expected to reach 98.51 million bpd.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com