10 October 2017, Sweetcrude, Lagos – The Bank of America, BoA, has said the Organisation of the Petroleum Exporting Countries, OPEC’s, output will remain at its current level.
On Monday, BoA’s Merrill Lynch, said OPEC’s output will not go beyond what it is currently and for the rest of the year, taking into consideration Saudi Arabia’s strong compliance with last year’s production cut and recent slow growth in Nigeria and Libya.
“Nigeria and Libya production simply cannot keep growing at the same pace” Francisco Blanch, head of commodities and derivatives research at BoA earlier said in the bank’s World at a Glance report for October.
“In the former, crude loadings are expected to average 1.9 million barrels per day, bpd, implying rather stable output levels into the year-end. In Libya, we see crude production stabilizing at around 940 thousand bpd in 4Q17”.
According to Blanch, the rising output by OPEC since March had resulted in a “relatively meagre” cut of 265, 000 bpd of world’s output since last year’s production cut deal by OPEC and Non-OPEC in November.
He added that Saudi Arabia’s compliance with the deal remains unwaiving however, meaning that OPEC supply will remain the same for the remainder of the year.
OPEC’s September 2017 Oil Market Report, said total OPEC-14 crude oil production averaged 32.76 mb/d in August, a decrease of 79 tb/d over the previous month. Crude oil output increased in Nigeria, while production showed declines in Libya, Gabon, Venezuela and Iraq.
On the other hand, OPEC said “Africa’s oil supply is projected to grow by 0.04 mb/d to average 1.85 mb/d in 2017, revised down by 0.01 mb/d due to a historical revision in production data from Africa other”.
It is expected that oil production in 2017 will grow in the Congo by 40 tb/d to average 0.35 mb/d, in Ghana by 70 tb/d to average 0.16 mb/d, and in Chad by 20 tb/d to average 0.13 mb/d. Production in Egypt, the Sudan, and Africa other is anticipated to decline in 2017, while oil output in South Africa is estimated to remain unchanged over a year earlier.
BoA forecasts that crude oil prices will average $50 per barrel for the rest of the year, inlcuding the first quarter of 2018.