OPEC´s choices are limited

June 28, 2019

Production from the Organization of the Petroleum Exporting Countries (OPEC), is currently the lowest in five years ahead of the OPEC+ meeting in Vienna 1-2 July.

Production excluding the OPEC countries plus Russia (Non-OPEC+) is forcasted to grow by 1.9 million barrels per day, year on year in the second half of 2019. Demand growth is expected to weaken to 1.1 million barrels per day for 2019 with 200,000 barrels per day at risk for the second half of 2019.

A bar chart showing the call-on-OPEC crude (demand) versus OPEC actual crude production in Million barrels per day. Source: Rystad Energy OilMarketCube

 

Therefore, OPEC’s supply choices are limited. There is no room for material increase, but further cuts may nonetheless not be needed, owing to:

  • IMO 2020 accelerating crude demand
  • Current tight market for medium/heavy crude
  • Risk of unplanned non-OPEC outages
  • Supply risks within OPEC member countries

An OPEC production of around 30.0-30.5 million barrels per day is needed to balance markets in 2019 and 2020, Rystad Energy´s view.

Learn more about OilMarketCube.

Find more information on pre-OPEC meeting topic here.

 

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Contacts:

Bjørnar Tonhaugen
Head of Oil Market Research
Phone: +47 24 00 42 00
bjornar.tonhaugen@rystadenergy.com

 

Carsten Torbergsen
Marketing Manager
Phone: +47 24 00 42 00
carsten.torbergsen@rystadenergy.com

 

About Rystad Energy

Rystad Energy is an independent energy research and business intelligence company providing data, tools, analytics and consultancy services to the global energy industry. Our products and services cover energy fundamentals and the global and regional upstream, oilfield services and renewable energy industries, tailored to analysts, managers and executives alike. Rystad Energy is headquartered in Oslo, Norway with offices in London, New York, Houston, Stavanger, Aberdeen, Moscow, Rio de Janeiro, Singapore, Bangalore, Tokyo, Sydney and Dubai.