The Organization of Petroleum Exporting Countries, OPEC, has revised upwards its 2018 forecast for total non-OPEC oil supply growth.
It, however, left unchanged its projection for world oil demand growth at 1.65 million barrels per day (bpd) this year.
The global oil cartel in its Monthly Oil Market Report revised up its non-OPEC supply growth estimate by 130,000 bpd compared to last month’s report, projecting non-OPEC supply growth of 1.86 million bpd this year.
“World oil demand in 2018 is forecast to grow by 1.65 mb/d, broadly unchanged from the previous month’s assessment, to stand at 98.85 mb/d”, OPEC reported.
Total Organisation for Economic Co-operation and Development. OECD commercial oil stocks, OPEC’s current gauge of the oil market rebalancing—were 26 million barrels below the latest five-year average, as per preliminary data for April.
Looking to the rest of 2018, the cartel pointed to “pronounced uncertainty about the second half of the year.”
It stated: “While oil demand in the US, China and India shows some upside potential, downside risks might limit this potential going forward, including a slowdown in the pace of economic growth in some major economies, stronger impact of policy reform with regard to retail prices, and further substitution toward natural gas.”
OPEC’s crude oil production increased by 35,400 bpd from April, to 31.869 million bpd last month, as Saudi Arabia, Algeria, and Iraq boosted production that was partially offset by lower production in Nigeria, Venezuela, and Libya.
Saudi Arabia, the biggest producer, raised its production by 85,500 bpd to 9.987 million bpd, according to OPEC’s secondary sources. The Kingdom self-reported a production increase of 161,400 bpd to 10.030 million bpd, just below its ceiling of 10.058 million bpd.
According to secondary sources, the biggest drop in May was registered in Nigeria, whose production fell by 53,500 bpd to 1.711 million bpd, as pipeline outages hampered production last month.
Venezuela was a close second in terms of a production decline in May, with output plummeting again, by 42,500 bpd to below 1.4 million bpd—1.392 million bpd, according to secondary sources.
With the projected higher pumping of oil by non-OPEC members into the global market, commodity-dependent countries like Nigeria’s foreign exchange earnings from crude oil exports may dip significantly with the attendant negative implications for wider deficits in their budgets