OPEC announced August forecast on oil production
By Rashid Shirinov
OPEC in its August report has improved the forecast for world oil demand in 2017 by 0.09 million barrels per day (bpd) to a record of 95,41 million bpd. The change is linked to better results of the first half of this year in the European and Asia oil producing countries.
İn the meantime, oil supplies from non-OPEC countries are expected to drop by 0.79 million bpd - to 56,13 million barrels by the end of 2016. This is 100,000 barrels more as compared to the July report. The betterment of forecast is due to the increased oil production in the U.S., U.K., India, Brazil, Oman and Ghana in the second quarter of 2016, that compensated for the deterioration of forecasts for Australia, Brunei, Malaysia, Thailand, Russia and CIS countries.
Meanwhile, August forecasts of OPEC on Azerbaijan remained unchanged as compared to the previous monthly oil market report.
OPEC forecasts Azerbaijan’s oil supply to average 0.85 million barrels per day (bpd) in 2016, which is 10,000 bpd less than the country’s oil production of 2015. A decline in oil production in Azerbaijan by 40,000 bpd in 2017 is also expected because of a lack of new project start-ups.
Currently, the main oil output in Azerbaijan comes from the Azeri-Chirag-Guneshli field. This offshore block produces Azeri Light oil with 0.15-percent sulfur content and 35 degrees API. Azerbaijan’s total proven oil reserves made up 7 billion barrels at the end of 2015, according to BP’s Statistical Review.
Richard Mallinson, the geo-politics analyst of independent research and consulting company Energy Aspects, assumes that the extraordinary meeting of OPEC countries expected for September will not change the situation in the oil market. Earlier media reported that OPEC may hold an informal meeting at the International energy forum in September and once again discuss the possibility of freezing the level of oil production.
“Currently, countries such as Venezuela and Algeria, apparently, initiate a new round of negotiations,” Mallinson said. He stated that Saudi Arabia and other influential members of OPEC may agree to participate in an informal meeting to demonstrate that they do not hinder the cooperation in the cartel, but this does not mean that they are ready to agree to freeze production.
Mallinson believes that as long as major producers, in particular Iran and Saudi Arabia, do not come to a compromise and do not support the proposal to freeze production, this initiative will not be any more successful than previous ones taken from the beginning of this year.
As for current oil prices, they lately saw a slight decrease. On August 10, OPEC oil basket’s price stood at $40.57 per barrel or $0.51 less than on August 9.
Prices of Brent and WTI crude oil also decreased on August 11. The price for October futures of the North Sea Brent oil mix decreased by 0.68 percent to $43.75 per barrel, while the price for September futures of WTI oil declined by 0.89 percent to $41.34 per barrel.
Being introduced on June 16, 2005 the OPEC Reference Basket (ORB) is made up of the following oil brands: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Rabi Light (Gabon), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
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Rashid Shirinov is AzerNews’ staff journalist, follow him on Twitter: @RashidShirinov
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