Low Price: OPEC predicts fall in supply from non-members in 2016

13 December 2015, Lagos – Oil supply from non-member countries will fall more sharply next year as world oil demand rises, the Organisation of the Petroleum Exporting Countries (OPEC) said in a forecast.

OPEC logoOPEC’s Monthly Oil Market Report (MOMR) follows its latest meeting in Vienna where it rolled over a policy of pumping crude, a development that would suggest its strategy of defending market share is working.

The production cartel predicted oil demand would increase by around 1.25 mb/d to average 94.14 million barrels a day next year, upping its forecast mainly as a result of “better-than-expected consumption in Europe and Other Asia,” an area including India, Indonesia and Thailand, among other Asian economies but not China.

It said, “Non-OPEC oil supply in 2016 is expected to contract by 0.38 million barrels per day over the current year to average 57.14 mb/d. Contributing factors include expected steeper production declines in US shale plays, legacy wells outnumbering newly drilled wells as well as the negative effects of capex cuts in different regions of the world.”

It projected Africa’s oil supply to decline by 30 tb/d to average 2.31 mb/d in 2016 year-on-year, unchanged from last month’s prediction.

On crude oil price movements, OPEC said that December official selling prices for Nigeria’s crudes hit their lowest level in more than 10 years. “Towards the end of the month, a larger-than-usual purchase from India’s IOC supported West African crude oil, but a nagging backlog of cargoes kept a lid on any movement in differentials,” the report said.

– Daily Trust

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