Non-OPEC Oil Supply to Boom in 2018

SEATTLE (Oil Monster): The intergovernmental organization of major oil producing nations- the Organization of Petroleum Exporting Countries (OPEC) has forecast increased oil supply from non-OPEC producers in 2018. According to the latest report published by the organization, the non-OPEC oil production growth is likely to stay higher than initially expected in 2018. Consequently, it anticipates lower demand for OPEC crude.

The OPEC monthly market report notes that Non-OPEC supply is expected to expand by almost 1.2 million barrels per day (bpd) during this year, nearly 160,000 bpd higher when compared with the earlier estimate. The previous monthly report had predicted an increase of around 990,000 bpd.

Much of the increase will come from the US and Canada, OPEC report says. As crude prices fly high, the North American region is expected to boost its output in order to take advantage of the higher prices. The market share of American oil exports which recorded sequential growth in 2016 and 2017 is expected to rise further in 2018. The forecast by the US Energy Information Administration (EIA) pegs the country’s average oil production at 10.3 million bpd in 2018, almost 11% higher from 2017.

The flood of new US and Canadian supplies seem to threaten efforts by OPEC countries to curb output and bring the market into balanced situation. Incidentally, OPEC member countries and Russia had agreed last year to extend the production cuts until the end of this year. Market participants including analysts feel that these countries might be forced to revise their decision during their June meeting, although individual countries have reiterated their stance to stick with production cuts.