OPEC may not reclaim crude oil market share soon, says IEA
It would thus be premature to suggest that Organisation of Petroleum Exporting Countries (OPEC) has won the battle for market share. The battle, rather, has just started, a new report by International Energy Agency (IEA) said on Wednesday.
According to IEA, fresh data on worldwide crude production was only a sign that global glut of oil was growing, which could make a recent recovery in oil prices unsustainable.
Besides, Nigeria’s crude oil production has increased by 19,500 barrels per day from the 1.67 million bpd it recorded in March to 1.88 mbp in April.
OPEC basket of 12 crudes stood at $63.00 a barrel yesterday, compared with $62.03 the previous day.
It stated that the move by the OPEC’s core Gulf members last November not to cut production in defense of prices was only the first step in a plan that includes actually ramping up output and aggressively investing in future production capacity – even as their non-OPEC counterparts keep tightening their belt.
The international watchdog said that despite tentatively bullish signals in the US, and barring any unforeseen disruption elsewhere, the market’s short-term fundamentals still look relatively loose.
The IEA noted that recent signs of tightening in the US oil patch must be put into perspective. “Amid continued political turmoil in the Middle East and North Africa, there is no lack of upside risk to prices – and downside risk to supply – in today’s oil market. Given the central role of US Light Tight Oil (LTO) as a main source of projected incremental oil supply, a slowdown in LTO supply would certainly have a large impact on oil balances. But the rest of the oil patch is not standing still. As the market continues to rebalance, pockets of supply growth are emerging from unsuspected corners”, it added
It hinted that there are signs the oversupply is moving into the market for refined products such as gasoline, meaning the recent rally in oil prices could lose steam.
Meanwhile, OPEC said in its May oil market report, that world oil demand growth for 2014 has been left broadly unchanged from the previous month’s report.
It stated that growth for the year stood at 0.96 mbpd and total oil consumption at 91.32 mbpd. “In 2015, world oil demand is anticipated to grow slightly more than the previous month’s projection, as a result of a positive revision to OECD Europe. World oil demand is now expected to grow by 1.18 mbpd to reach around 92.50 mb/d in 2015.
According to secondary sources, total OPEC crude oil production averaged 30.84 mbpd in April, an increase of 18 tbpd over the previous month.
Crude oil output increased mostly from Iraq and Iran while production showed the largest drop in Angola. According to secondary sources, OPEC crude oil production, not including Iraq, stood at 27.17 mbpd in April, down by 29 tbpd over the previous month.
OPEC NGL production is forecast to grow by 0.19 mbpd to average 6.02 mbpd in 2015, following growth of 0.18 mbpd in 2014.