Gulf Oil and Gas accountACCOUNT

World Oil Supply - May 2017

Source: OPEC_RP170507 5/11/2017, Location: Europe

Share |
Preliminary data indicates that world oil supply fell by 0.41 mb/d in April to average 95.81 mb/d. However, global oil production was 831 tb/d higher than a year ago and increased by 363 tb/d y-o-y in 1Q17.

Non-OPEC oil supply in 2016 was revised down by 18 tb/d due to a downward revision of Russian oil supply in 4Q16 to average 57.30 mb/d – indicating a y-o-y decline of 0.71 mb/d. In contrast, oil supply in 2017 was revised up by 0.36 mb/d to average 58.25 mb/d – representing y-o-y growth of 0.95 mb/d , following changes in all quarters, mostly in the US, and based on US actual production data from February and new forecasts for crude oil output.

In 2017, US growth forecast was revised up again, rising by 0.28 mb/d, to average 0.82 mb/d. Similarly, but to a lesser extent, Canada, Brazil and Kazakhstan were revised up, while the growth forecasts for Mexico, China, Azerbaijan, Indonesia, Oman and Colombia were in decline.

OPEC NGLs and non-conventional oil production in 2016 revised down by 34 tb/d to average 6.05 mb/d, indicates a growth of 0.11 mb/d y-o-y, while for 2017, the growth forecast revised up by 40 tb/d to 0.17 mb/d to average 6.22 mb/d.

In April, OPEC production decreased by 18 tb/d, according to secondary sources, to average 31.73 mb/d.

Non-OPEC oil supply in 2016 is estimated to have averaged 57.30 mb/d, representing a decline of 0.71 mb/d over the previous year, and a downward revision of 0.02 mb/d from the last assessment. Within the quarters, non-OPEC oil supply encountered historical downward revisions in 4Q16 by 72 tb/d, only in Russia.

Non-OPEC supply in 2016 saw strong declines in OECD Americas (0.47 mb/d), China (0.31 mb/d), and Developing Countries (0.10 mb/d). Growth was seen in the FSU (0.17 mb/d), driven by robust output from Russia. The estimated oil supply in OECD Americas in 2016 show a decline of 0.47 mb/d compared with a growth of 0.93 mb/d in 2015. The decline was related mostly to the US onshore crude oil output which affected by low oil prices, while the outages of Canadian oil sands production due to wildfire in Alberta and annual natural decline in Mexico which were not due to the price. Chinese crude oil production saw another big decline in 2016 due to reduced onshore performance, mature fields and low investment from the main domestic companies. Moreover, In Latin America, total oil supply was disappointing in 2016 due to the lack of new project implementation in Brazil as well as a higher annual decline in Colombia. In regards to exploration and production (E&P), oil companies continued to cut their spending following the drop in oil prices, resulting in oil discoveries declining to their lowest level in more than 70 years at 2.4 billion barrels in 2016.

For 2017, non-OPEC oil supply is now projected to grow by 0.95 mb/d, up by 373 tb/d from the previous MOMR, to average 58.25 mb/d. This is due to higher expectations for US growth – revised up by 285 tb/d – along with higher growth in Canada, Norway, Brazil, Russia, Kazakhstan and China. Preliminary non-OPEC oil supply in April dropped by 440 tb/d m-o-m due to lower production from OECD, Russia and China.

Non-OPEC supply quarterly distribution in 2017 shows consecutive q-o-q increases, except in 2Q17, which is due to the usual non-OPEC seasonal pattern for maintenance. Oil supply in 2H17 is forecast to increase by 0.77 mb/d over 1H17.

Regarding regional non-OPEC supply changes, Graph 5 - 2 shows that the main rebound in annual growth will be in OECD Americas, and to some extent, DCs, particularly Latin America and Africa. In Graph 5 - 3, non-OPEC supply quarterly changes are seen in different quarters in 2017.

On a country-by-country basis, the main contributors to growth in 2017 are expected to be: the US with 0.82 mb/d, Canada with 0.22 mb/d, Brazil with 0.21 mb/d, Kazakhstan with 0.15 mb/d, Africa Other (mainly Ghana) with 0.05 mb/d, Russia with 0.07 mb/d and Congo with 0.03 mb/d. On the flip slide, declines are envisaged in Mexico with 0.17 mb/d, China with 0.15 mb/d, Azerbaijan with 0.06 mb/d and Indonesia with 0.05 mb/d as well as Oman and Colombia, which are anticipated to each decline by 0.04 mb/d.

OECD
Total OECD liquids supply in 2016 is estimated to contract by 0.47 mb/d to average 24.83 mb/d. In 2017, OECD supply is forecast to average 25.64 mb/d, representing growth of 0.81 mb/d, following an upward revision of 0.31 mb/d.

OECD Americas
OECD Americas’ oil supply in 2016 is estimated to average 20.60 mb/d. This represents a decline of 0.47 mb/d y–o-y. In 2016, oil output fell in the US and Mexico, but it grew in Canada. In 2017, oil supply is expected to grow by 0.87 mb/d to average 21.46 mb/d in the region. This is an upward revision of 294 tb/d and mostly due to higher expected US onshore crude output. Canada is also expected to see robust growth of 0.22 mb/d in 2017, while a decline of 0.17 mb/d is anticipated in Mexico.

US
US crude oil production averaged 9.03 mb/d in February 2017, and increase of 0.19 mb/d over the previous month, of which 119 tb/d is attributed to oil output growth in the state of Texas, mainly from the Permian Basin, and, to a lesser extent, growth from the Bakken formation in North Dakota as well as in Oklahoma and New Mexico. Oil production declined in GoM and Alaska by 22 tb/d and 3 tb/d, respectively. US NGL output in February increased by 239 tb/d m-o-m to 3.60 mb/d. Other liquids output, mainly biofuels, increased by around 100 tb/d in February m-o-m. Overall, US liquids production increased by more than half a million barrels – the highest growth ever recorded, at 523 tb/d, since January 2013 – to average 13.94 mb/d in February. This was also higher by 125 tb/d y-o-y. It can be expected that any move towards higher prices will likely lead to a resurgence in US tight oil production from the major shale regions.

US onshore crude oil output excluding Alaska declined from a peak of 7.52 mb/d in 2Q15 to 6.62 mb/d in 4Q16. Preliminary production data for 1Q17 indicates growth of 100 tb/d q-o-q. Production has since seen an increase of 177 tb/d from October until the end of February 2017 based on monthly data and was up by 255 tb/d over December 2016 based on monthly data for February.

In terms of US tight oil production, output declined by 0.59 mb/d from a peak of 4.65 mb/d in March 2015 to average 4.06 mb/d in November 2016. However, with the pick-up in drilling activity, as well as increasing cash flow in the tight oil industry, US tight crude output is expected to rise quickly and increase by 614 tb/d for the year of 2017.

In the GoM, it is estimated that around 1.61 mb/d of crude oil and condensate was produced in 2016, indicating growth of 92 tb/d y-o-y. In 2017, crude oil production is expected to see further growth of 68 tb/d over 2016 to reach at least at 1.68 mb/d. This will come mainly from Thunder Horse Etension project’s startup as well as the newly commissioned Julia and Stones oil fields supported for a capacity of 20 tb/d, as well as production ramp-ups such as Jack/St Malo, Na Kika, King, Phoenix, Holstein, Horn Mountain, Delta House, Tubular Bells, Kodiak, Gunflint, Dalmatian, Heidelberg, Lucius, Mars B, Cardamom Deep and Rio Grande, mostly regular crude oil with an API degree greater than 23. Four new small projects – Coelacanth, Odd Job, South Santa Cruz and Barataria – are also expected to start up in 2017.

Capital expenditures by 44 companies who have the most activities in US onshore fields increased by $4.9 billion, or 72%, in 4Q16 compared to 4Q15, according to a financial analysis from EIA. This rise in spending is said to be the largest y-o-y increase for any quarter by this group of companies since at least 1Q12. Higher oil prices are contributing to an increase in upstream earnings for US producers, prompting some companies to increase their investment budgets.

US total liquids production in 2017 is forecast to grow by 0.82 mb/d y-o-y to average 14.45 mb/d. This forecast has been revised up by 0.28 mb/d this month, compared to last month’s MOMR, following recent drilling activities in the most prolific tight oil regions, particularly in the Permian and Eagle Ford formations.

In 2017, crude oil production is forecast to grow by 0.56 mb/d after a deduction for annual declines of around 120 tb/d, to average 9.4 mb/d, depending on rig counts, as well as the number of completed wells, following a decline in 2016 of approximately 0.54 mb/d. Declines in onshore conventional crude in 2017 will be somewhat offset by growth of 0.07 mb/d in the GoM, as well as tight crude growth. NGL output is also expected to increase by 0.27 mb/d in 2017 amid an increase in natural gas prices to average 3.75 mb/d. NGL output growth has slowed dramatically in recent months but due to the start-up of a number of new export terminals as well as petrochemical facilities ? to stimulate stronger growth of the required feeds such as ethane and LPG. The main component of US oil output – tight oil – is forecast to grow by at least 0.61 mb/d y-o-y to average 4.88 mb/d. The number of drilling rigs and the reactivation of companies’ spending are the two most important factors leading to an expected output surge in the coming months.

US oil rig count
According to Baker Hughes’ weekly report for 5 May 2017, the total number of US drilling rigs increased by 7 units w-o-w to 877 rigs. This was up by 462 units y-o-y. Within the components, oil rigs increased by 6 units to 703 rigs, while gas rigs rose by 2 units to 173 rigs, w-o-w.

By regions, including the GoM, Texas, Oklahoma, Louisiana, New Mexico, North Dakota and Pennsylvania, the number of active oil rigs stood at 18, 443, 120, 62, 56, 43 and 33 rigs, respectively. The total rig count in the Permian Basin increased to 349 rigs, up by 7 units, w-o-w. There were 43 and 75 oil rigs in the Williston and Eagle Ford Basins, respectively. In terms of well trajectory, the number of horizontal wells increased by more than 130%, y-o-y, from 318 units to 734 rigs. Moreover, rigs for directional and vertical wells increased by 23 units each, y-o-y, to 67 rigs and 76 rigs, respectively.

Overall, the number of oil rigs has risen by 387 units from its lowest point last year in the week ending 27 May 2016.

Output from the prolific US shale plays is not rising as sharply as drilling suggests because producers have left a record number of wells incomplete. They are rushing to complete drilling to fulfil contractual obligations and hold onto land leases, but they not pumping the oil from all of the wells. Drillers have left around 100 wells per month incomplete in the past five months, as drilling activity has risen to its highest in two years.

Canada
Canada’s oil supply in 2016 is estimated at 4.50 mb/d, an increase of 80 tb/d. According to preliminary national source data, Canadian oil output in January increased by 0.18 mb/d m-o-m to settle at 5.00 mb/d, yet the highest record was reached in November 2016 at 5.04 mb/d. Oil sands output – bitumen and synthetic crude – increased by 82 tb/d m-o-m to settle at 2.80 mb/d m-o-m, with conventional oil also increasing by 25 tb/d to 1.22 mb/d. NGL production in January also rose, increasing by 77 tb/d m-o-m, to average 0.98 mb/d, the highest record ever. Nevertheless, oil production in 1Q17 is expected to decrease by 60 tb/d q-o-q to average 4.80 mb/d, following a fire at Syncrude’s upgrader in Mildred Lake, which led to the shutdown of the 350 tb/d facility in the middle of March. It is expected the outages will be around 150 tb/d in March and 350 tb/d in April. However, the 2017 forecast, despite applying downward revisions of 10 tb/d in 2Q to 4Q, has been revised up by 6 tb/d due to higher-than-expected output in January compared to the April MOMR. This indicates growth of 0.22 mb/d, with overall average production at 4.72 mb/d in 2017.

Canada’s oil rig count
Canada’s total rig count reached a seasonal low of 82 rigs in the week ending 5 May 2017 from its peak in 10 February 2017 at 352 rigs. On a monthly basis, the total rig count has fallen to average 108 rigs in April from the previous month.

In the same period, the number of oil rigs declined by 124 units m-o-m to average 108 rigs. The number of active rigs in Alberta – the main state for oil sands production – decreased to 65 land rigs. In the same week, the rig count fell and reached an average of 14 rigs and 2 rigs in British Colombia and Saskatchewan, respectively.

Mexico
Mexican liquids production in 2016 declined by 0.13 mb/d to average 2.46 mb/d. Crude oil output in March 2017 was flat at 2.2 mb/d. Therefore the total liquids production, including NGLs, in 1Q17 remains unchanged at an average of 2.33 mb/d. However, this is 0.04 mb/d lower than 4Q16. According to this annual decline rate trend, oil production will fall by 0.17 mb/d to average 2.29 mb/d in 2017.

Preliminary estimates suggest that Mexico was in full conformity during March 2017 with the Declaration of Cooperation at 100 tb/d by the end of 1H17. It is expected that the declines in Mexico that are mostly coming from onshore mature fields that produce light to heavy crude oil and condensate will be partially offset by the extra-heavy oil of the KU-Maloob-Zaap (KMZ) project in offshore Mexico. KMZ produced around 0.33 mb/d in 2016 and is expected to grow by 40 tb/d in 2017.

OECD Europe
Total OECD Europe’s oil supply is estimated to fall by 30 tb/d to average 3.77 mb/d in 2017, following growth of 30 tb/d in 2016. Declines are expected mainly in Norway and the UK.

Norway
Norway’s oil supply is estimated to have increased by 0.05 mb/d over the previous year to average 1.99 mb/d in 2016. Preliminary production figures for 1Q17 indicate average production of about 2.09 mb/d, a decline of 20 tb/d over 4Q16. Preliminary production figures for March 2017 show average daily production of 2.15 mb/d consisting of oil, NGLs and condensate, which shows an increase of 63 tb/d compared to February. Following production outages in the Goliat field due to technical issues in January and for a short period in February, it seems that with drilling of two wells in the nearby Snadd discovery during 2017, production from this field in the coming months would be higher than the capacity of 100 tb/d. Average daily liquids production in March was at 1.73 mb/d for oil, 0.38 mb/d for NGLs and 0.03 mb/d for condensate. Oil production is about 8.0% above the rate recorded in March of last year and about 4.3% above the Norwegian Petroleum Directorate’s (NPD) prognosis for March 2017. Oil production is about 1.6% above the forecast so far this year, according to the NPD. Crude oil production in Norway is expected to rise over April and May.

UK
The UK’s oil production is expected to decline by 20 tb/d to average 1.00 mb/d in 2017, following growth of 60 tb/d in 2016. In 2017, oil production in March declined by 10 tb/d m-o-m to average 1.05 mb/d, after a decline of 10 tb/d in February. The UK’s production is expected to see continued declines, in large part due to an unscheduled outage at Buzzard, which feeds into the Forties stream, in early April. Oil production in the second quarter is expected to decrease by 30 tb/d q-o-q.

Developing Countries
Total oil production from the group of Developing Countries (DCs) declined by 100 tb/d y-o-y to average 12.21 mb/d in 2016. In 2017, DCs’ supply is forecast to grow by 110 tb/d to average 12.32 mb/d, revised up by 0.01 mb/d from last month’s assessment, following an upward revision of 23 tb/d in 1Q17 mainly from Other Asia region. The key region for growth is expected to be Latin America (0.15 mb/d) – mainly from Brazil – to average 5.25 mb/d and, to a lesser degree, Africa (50 tb/d) – mainly from Congo and Ghana – to stand at 2.16 mb/d. Other Asia’s oil supply is anticipated to see a decline of 40 tb/d to average 3.68 mb/d, mainly from Indonesia. There is also an expected decline of 50 tb/d for the Middle East, with output falling to 1.23 mb/d.

Other Asia
Other Asia’s oil production increased by 20 tb/d in 2016 to average 3.72 mb/d, mainly from Indonesia. In 2017, oil production is expected to increase slightly by 10 tb/d in India, Thailand and Other Asia, which would offset an expected decline of 50 tb/d in Indonesia. Malaysia’s production in the current year was revised up by 10 tb/d due to an upward revision in the first quarter. Average production is expected to remain unchanged from last year at 0.74 mb/d. Oil production from this region is expected to decline by 40 tb/d in 2017 to average 3.68 mb/d, mainly due to low performances in mature Indonesian oil fields.

Latin America
Oil supply from Latin America is projected to increase by 0.15 mb/d to average 5.25 mb/d in 2017. Oil production declined in the region by 100 tb/d in 2016. The expected growth of 0.21 mb/d in Brazil is estimated to offset declines of around 60 tb/d in other countries.

Brazil
Brazil’s liquids supply is estimated to average 3.14 mb/d in 2016, an increase of 0.06 mb/d over the previous year. Crude oil output showed a decline of 11 tb/d m-o-m in February to average 2.68 mb/d. Preliminary crude oil production based on Petrobras’ trend also shows a decrease of 75 tb/d m-o-m in March. NGL output in February also declined by 6 tb/d to 108 tb/d. Biofuel output in February increased by 6 tb/d m-o-m to average 551 tb/d. Brazil’s liquids production forecast in 2017 has been revised up by 7 tb/d to average 3.35 mb/d, but the yearly growth remains unchanged at 0.21 mb/d.

Output retreated in 1Q17 as state-led producer Petrobras carried out a series of maintenance shutdowns at the Lula field, which is Brazil’s biggest oil and natural gas field. Following shutdowns at the P-40 platform in the Marlim field and the FPSO Cidade de Anchieta in the Parque das Baleias complex in January, a similar shutdown was carried out at the FPSO Cidade de Paraty in February, as well as at the Cidade de Angra dos Reis floating production, storage and offloading vessel (FPSO) for maintenance in March by Petrobras. Similar to 1Q17, Petrobras lost about 5% of its daily production in 1Q16 due to maintenance. Petrobras expects to install three new FPSOs in 2017 and ramp up production from the three floating production units that came onstream last year.

Colombia
In Colombia, average oil production declined by 0.12 mb/d y-o-y to average 0.91 mb/d in 2016. The main reason for this high decline rate was reduced investment due to lower oil prices in 2016. Crude oil output in March declined by 60 tb/d to average 0.80 mb/d, while total liquids output declined by 30 tb/d m-o-m to average 0.83 mb/d. Oil production in the first quarter declined by 10 tb/d q-o-q to average 0.86 mb/d. Oil production in Colombia is expected to decline by 40 tb/d over the previous year to average 0.87 mb/d in 2017.

FSU
FSU’s oil supply grew by 0.17 mb/d in 2016 to average 13.86 mb/d, revised down by 20 tb/d from the previous MOMR due to a downward revision of 72 tb/d during 4Q16 in Russia. In 2016, oil production in Russia increased by 0.24 mb/d, while declining in other countries of the region.

The oil production forecast for 2017 was revised up this month by 49 tb/d to now show growth of 0.16 mb/d for a total of 14.02 mb/d. Upward revisions were seen in Russia and, to some extent, in Kazakhstan following an upward revision in 1Q17.

Russia
Oil production in Russia in April averaged 11.18 mb/d, representing a decline of 100 tb/d compared to average production in 1Q17. In terms of crude oil production, preliminary estimation indicate a similar decline of 100 tb/d, lowering output in April 2017 to 10.39 mb/d. Hence, NGLs production has been stagnant at around 0.79 mb/d in the recent months. The largest drops in output were in small and independent companies, while, for example, oil production was increased at the Novoport and Prirazlomnoye projects operated by Gasprom Neft. However, other major companies such as Rosneft, Lukoil and Bashneft produced less than the October level, as a benchmark for production adjustment, or kept it steady. They managed their production by adding output from greenfields and lowering production at brownfields.

Caspian
Azerbaijan’s oil supply forecast for 2017 remained unchanged with a contraction of 70 tb/d to average 0.78 mb/d, while oil production in 2016 declined by only 10 tb/d. Azeri oil output in April was reported higher by 32 tb/d m-o-m at 725 tb/d, but output of NGLs was flat at 69 tb/d. Therefore, total liquids output in April increased by 30 tb/d to average 0.79 mb/d. This led to an upward revision in oil supply by 10 tb/d in 2017, reaching 0.78 mb/d, indicating a contraction of 60 tb/d.

Kazakhstan’s oil output averaged 1.72 mb/d in 1Q17, some 40 tb/d higher y-o-y. Preliminary production data in April showed a steady output of 1.76 mb/d compared to March, which 260 tb/d higher y-o-y. The Kashagan ramp-up was steeper than expected in March, reaching 190 tb/d at the end of the month, while output was around 130 tb/d in February, five months after its re-start. However, the government hopes to reduce oil production at other fields in the coming months when the weather becomes warmer. Oil supply in 2016 declined by 40 tb/d y-o-y to average 1.56 mb/d.

China
China’s supply in 2016 was estimated to contract by 0.31 mb/d over the previous year to average 4.08 mb/d. Crude oil output in March 2017 averaged 3.90 mb/d, lower by 27 tb/d m-o-m and down 188 tb/d y-o-y. China’s total liquids production declined by 20 tb/d m-o-m to average 4.01 mb/d in March. The production contraction in 2017 was revised up by 10 tb/d to see a yearly contraction of 150 tb/d y-o-y, down to 3.93 mb/d. Crude oil production is likely to recover gradually due to higher operational activities and more spending in 2017. Among the major Chinese companies, Petrochina is planning to increase spending from $19.8 billion to $22.8 billion in the current year. Despite increasing capex, Petrochina’s total production for the whole year on average will decline by 90 tb/d to almost 2 mb/d, according to their forecasts. Contractions in domestic crude oil output are also expected by Sinopec and CNOOC despite more or less higher investments in 2017.

OPEC NGLs and non-conventional oils
OPEC NGLs and non-conventional liquids in 2016 were revised down by 30 tb/d due to weaker GTL output in Qatar in 2H16 to average 6.05 mb/d in 2016, representing growth of 0.11 mb/d over the previous year. In 2017, they are projected to average 6.22 mb/d, represents an upward revision of 40 tb/d and a growth of 0.17 mb/d over the previous year.

OPEC crude oil production
According to secondary sources, OPEC crude oil production decreased by 18 tb/d from the previous month to average 31.73 mb/d in April. Crude oil production declined in UAE, Libya, Iraq and Iran I.R., but increased in Angola and Saudi Arabia.

World oil supply
The world oil supply in 2016 averaged 95.82 mb/d, representing an increase of 0.34 mb/d compared to a year ago. The relatively weaker oil prices, lower investment and cuts in IOCs’ Capex led to a decline of 0.42 mb/d in non-OPEC output, particularly the US oil production, which was partially balanced by higher OPEC crude oil output of 0.95 mb/d.

Preliminary data indicates that global oil supply decreased by 410 tb/d in April to average 95.81 mb/d, higher by 0.83 mb/d y-o-y. A decrease in non-OPEC supply (including OPEC NGLs) of 0.39 mb/d, together with a decline of 0.02 mb/d from OPEC, further reduced the overall global oil output in April. The share of OPEC crude oil in total global production stood at 33.1% in April, an increase of 0.1% from the month before.

Estimates are based on preliminary data for non-OPEC supply, direct communication for OPEC NGLs and non-conventional liquids, and secondary sources for OPEC crude oil production.

Oil News in Austria >>

Austria >>  11/13/2017 - Over the years 2014 through 2016, global oil inventories grew rapidly, as global oil supply outpaced world oil demand. During the same period, the cru...
Austria >>  11/13/2017 - World oil demand growth in 2017 was adjusted higher from the previous month by 74 tb/d, mainly to reflect better-than-expected data from China in 3Q1...

Austria >>  11/13/2017 - World oil supply in October increased by 0.53 mb/d m-o-m from the previous MOMR to average 96.71 mb/d, representing an increase of 0.17 mb/d y-o-y. ...
Austria >>  11/13/2017 - In October, preliminary data shows that US crude oil imports increased to average 7.7 mb/d, up by 564 tb/d from last month and an increase of 132 tb/...

Algeria >>  11/9/2017 - State energy company Sonatrach and Baker Hughes, part of GE (BHGE), will set up a joint venture and build an oil equipment plant in Algeria at a cost ...
Argentina >>  11/7/2017 - Oil consumption in Argentina was flat during the month of July 2017 at 0.72 mb/d, with mixed product performance. All transportation fuels were in pos...

Related Categories: Coal  Electricity  General  Natural Gas  Oil 

Related Articles: Coal  Electricity  General  Natural Gas  Oil 


Austria Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 |

More News

 

Oil & Gas Companies in Austria >>


Related Links

Gulf Oil and Gas
Copyright © Universal Solutions All rights reserved. - Privacy Policy.