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EIA forecasts stable oil production in Azerbaijan

11 September 2020 11:10 (UTC+04:00)
EIA forecasts stable oil production in Azerbaijan

By Ayya Lmahamad

Azerbaijan’s forecast for 2020-2021 average daily oil production is stable according to the U.S. Energy Information Administration report released in September.

The agency forecasted 710,000 barrels of daily oil production in 2020, and 740,000 barrels of daily oil production in 2021, same as in the report for Augsut.

Moreover, according to the EIA’s Short-Term Energy Outlook report, average daily oil production in Azerbaijan was 770,000, 700,000 and 670,000 barrels in the first, second and third quarters of 2020 respectively.

Furthermore, average daily oil production is projected to be 700,000 barrels in the fourth quarter of 2020.

Likewise, EIA'S forecast for Brent oil average price is $44/ barrel during the fourth quarter of 2020 and rise to an average of $49/barrel in 2021 as oil markets become more balanced.

It should be noted that in April 2020, OPEC and non-OPEC countries entered into agreement on reduction of daily oil production by 9.7 million barrels in May-June and 164,000 barrels for Azerbaijan.

Thus, according to the “Declaration on Cooperation”, Azerbaijan produced 718,000 barrels of crude oil per day in October 2018, while in May-July 2020, the country had to maintain the average daily production of crude oil at 554,000 barrels.

On July 31, the first phase of the OPEC+ agreement of April 12 to reduce daily oil production by 9.7 million barrels was completed.

In the second phase of the agreement, covering the period from August 1 to December 31, the daily production of crude oil in OPEC+ countries will be reduced by 7.7 million barrels, which is 18 percent less than in October 2018.

During this period, Azerbaijan must reduce daily crude production by 131,000 barrels and keep it at 587,000 barrels. Thus, during this period Azerbaijan's restrictions on daily production of crude oil will be reduced by 33,000 barrels compared to the previous three months.

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