OPEC ups crude oil production by 810,000bpd

Contrary to the expectations that the Organisation of Petroleum Exporting Countries (OPEC) will reduce the flow of crude oil to the global market to reduce the current oversupply, and stabilise the plummeting prices, the organisation increased production by 810,000 barrels per day in March, according to the Monthly Oil Market Report (MOMR) released at the weekend.

OPEC has also stated that it will continue increasing output, despite an oversupply, projecting an increased demand of 80,000 barrels per day higher for this year than anticipated.

For the month of March, OPEC produced an average of about 30.79 million barrels per day, representing an increase of 810,000 barrels per day.

“Crude oil output increased mostly from Saudi Arabia and Iraq, while Libya saw a return of about 165, 000 barrels per day from shut-in wells in active oil fields,” OPEC said in MOMR report.

Non-OPEC oil supply is expected to grow by 680,000 barrels per day, up from the previous month.

The organisation projects US shale oil and Canadian oil sands output is expected to see lower growth due to declining rig counts.

The demand of oil in Iraq has continued to decline, shrinking by about 16 per cent from the previous year.

Saudi Arabian demand increased by about eight percent since last year due in part to increased use of jet fuel, gasoline and gasoil.

“Almost two thirds of 2015 oil demand growth is seen coming from China, (Indonesia, Malaysia, Philippines, Thailand) and the Middle East,” according to the report.

The world economic growth forecast for 2015 remains at 3.4 percent.

The eurozone is forecast to grow an additional 1.3 percent higher than previously expected, while Japan’s estimated growth has been lowered by 0.8 percent.

India’s economy is forecast to grow by seven percent.

In the supply and demand balance, required OPEC crude oil is estimated at 29.3 million barrels per day in 2015.

OPEC last November decided against cutting its production despite misgivings from its non-Gulf members, after Saudi Oil Minister Ali al-Naimi said the group needed to defend market share against US shale oil and other competing sources.

OPEC officials including Secretary-General Abdullah al-Badri have started to express confidence that a bottoming out of prices and a recovery may be under way.

The talks on OPEC’s long-term strategy – which is updated every five years –  had continued in February 2015, while OPEC oil ministers, who decide the group’s output policy, are not scheduled to meet until June 5,2015.

–ThisDay

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