Crude oil production outside the Organization of Petroleum Exporting Countries (OPEC) is set for further, and more intensive, growth this year and next, according to the latest monthly report of the cartel.
With U.S. production alone estimated to have hit 11.6 million bpd earlier this month as per figures from the Energy Information Administration (EIA), it’s no wonder OPEC sees the United States as the biggest driver behind non-OPEC supply growth, which it sees this year at 2.31 million bpd. This is 90,000 bpd more than what OPEC forecast a month earlier, and will be also helped by higher production in Canada, Russia, and Kazakhstan.
For the United States alone OPEC forecasts daily supply to reach 16.46 million barrels this year, rising considerably in 2019 as well, to 18.15 million bpd. This year, OPEC sees U.S. production growing by 2.06 million bps from 2017 and further by 1.69 million bpd in 2019. It is worth noting, however, that these figures include not just crude oil but also natural gas liquids.
In crude oil alone, OPEC expects U.S. producers to boost output to 11.43 million bpd in the last quarter of 2018 and continue ramping up production until it hits 12.5 million bpd at the end of 2019.
Thanks to these developments, oil production outside OPEC will reach 59.86 million bpd this year, growing further to 62.09 million bpd in 2019. That would represent a growth rate of 2.23 million bpd for 2019 from 2018, an upward revision by a considerable 120,000 bpd from OPEC’s October Monthly Oil Market Report.
In this context, then, it is no surprise OPEC officials, notably Saudi Arabia’s Khalid al-Falih have started to talk about production cuts again for fear of another glut like the one that dragged prices below US$30 a barrel four years ago. Whether importers would be on board with this, however, is questionable.
