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World Oil Supply - November 2017

Source: OPEC_RP171107 11/13/2017, Location: Europe

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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.

Preliminary non-OPEC oil supply, including OPEC NGLs, was up by 0.68 mb/d m-o-m in October to average 64.12 mb/d. For 2017, non-OPEC supply is estimated to grow by 0.65 mb/d y-o-y in 2017 to average 57.67 mb/d, representing a downward revision of 0.02 mb/d from last month’s report. While the oil supply forecast in the OECD Americas was revised up by 16 tb/d, oil supply in OECD Europe, Other Asia and Latin America was revised down by 40 tb/d. The non-OPEC oil supply forecast for 2018 was also revised down by 0.09 mb/d to average 58.54 mb/d, with growth revised down by 0.07 mb/d to 0.87 mb/d, y-o-y.

OPEC NGLs and non-conventional liquids production averaged 6.31 mb/d in 2017, an increase of 0.17 mb/d y-o-y. In 2018, production is forecast to grow by 0.18 mb/d to average 6.49 mb/d.

In October 2017, OPEC crude oil production decreased by 151 tb/d, according to secondary sources, to average 32.59 mb/d.

Monthly revisions on non-OPEC supply growth forecast
According to the latest data up to the end of October, particularly the quarterly supply development in 3Q17, the forecast for non-OPEC oil supply in 2017 was revised down by 23 tb/d to 57.67 mb/d, to now show growth of 0.65 mb/d y-o-y. The non-OPEC oil supply forecast for 2018 was also revised down in absolute terms by 0.09 mb/d to average 58.54 mb/d, and growth revised down by 0.07 mb/d to 0.87 mb/d. Any changes in the production forecast of the non-OPEC countries in 2017 and the next year are based on the historical production progress, oil field developments, periodical and unexpected maintenance, unexpected outages due to weather and disruptions and finally new start-ups and production expansion plans.

In OECD Americas, the supply forecast in Canada was revised up for the current year by 0.07 mb/d, while the US and Mexico’s production forecast were revised down. The Canadian liquids production forecast for 2018 was also revised up by 0.04 mb/d to average 0.23 mb/d, y-o-y. In OECD Europe, Norwegian oil production for 2018 was revised down as was the forecast for Australia. Nevertheless, OECD supply growth in 2018 remains at 0.9 mb/d.

In Developing Countries (DCs), Brazil’s production forecast was revised down in 2017 and 2018, following the slowdown in expected growth in 2Q17 and 3Q17, but at the same time, the supply forecast for Colombia for both years was revised up due to higher-than-expected actual production in the past three quarters. Moreover, India’s supply forecast was also adjusted down for 2018. Following the upward revisions in China’s supply forecast for 3Q18 and 4Q18, a lesser decline is expected for Chinese production in 2018.

Non-OPEC oil supply highlights in 2017
The forecast for non-OPEC supply growth for 2017 has been revised downward by 0.02 mb/d since last month’s assessment to 0.65 mb/d, to average 57.67 mb/d. While the supply forecast for Canada and Colombia has improved, expected growth in the US, Mexico, Norway, UK, India, Brazil and FSU others has been adjusted down. Non-OPEC preliminary oil supply in October rose by 0.52 mb/d m-o-m, mainly in Mexico, Norway, UK, Malaysia, Brazil, Congo, Kazakhstan, Azerbaijan and China while part of this incremental output in October was offset by declines in the US, Canada and Ghana to average 57.60 mb/d.

The US remains the key driver of non-OPEC supply growth, adding 0.59 mb/d to non-OPEC production in 2017, supported by other countries such as; Canada with 0.26 mb/d, Brazil with 0.18 mb/d, Kazakhstan with 0.18 mb/d, Ghana with 0.07 mb/d and Congo with 0.05 mb/d.

In constrast, oil supply in 2017 is mainly expected to contract in Mexico by 0.23 mb/d, China by 0.11 mb/d, Azerbaijan by 0.06 mb/d, in Oman and Russia by 0.04 mb/d each, and in Egypt, Colombia and Vietnam by 0.03 mb/d each.

In 2H17, non-OPEC supply is predicted to show milder growth of 0.20 mb/d compared to 1H17, due to lower expected oil production from the FSU, China, Other Asia and OECD Europe (Table 5 - 2). However, higher output from OECD Americas, OECD Asia Pacific, Latin America and Africa is anticipated in 2H17. The main factors for higher growth in these regions are the current improving price environment, which is for example more suitable for shale producers; and seasonal higher output for instance in Canada.

Non-OPEC oil supply highlights in 2018
Non-OPEC supply in 2018 was revised down by 94 tb/d compared to last month’s analysis to average 58.54 mb/d, and now is expected to grow at a slower pace, which was also revised down by 71 tb/d to 0.87 mb/d y-o-y, compared to the previous month’s MOMR.

This is mainly due to lower-than-expected supply forecast for Mexico, Norway, Other OECD Europe, Australia, India and Brazil, while the expectations for Canada, Colombia and China were revised up this month. As a result, overall non-OPEC supply growth for the next year was revised down by 0.07 mb/d to average 0.87 mb/d. The US, Canada, Brazil, the UK, Kazakhstan, Ghana and Australia, are expected to be the key countries driving growth next year, in contrast to Mexico, China, Azerbaijan Colombia and Oman, which are expected to see a further decline in oil supply.

Highlights actual non-OPEC quarterly oil supply in 2016 the estimate for 2017 and forecast for 2018. The quarterly distribution for nonOPEC supply in 2017 indicates the regular seasonal pattern due to maintenance, particularly in offshore areas, but with higher production levels compared to the same quarters in 2016. 4Q17 is forecast to be the quarter showing the highest level of oil supply at 58.20 mb/d, compared with other quarters. For 2018, due to the increase in US shale production, higher growth is expected, as well as a higher quarterly distribution throughout the year.

1H18 is forecast higher by 0.64 mb/d than 2H17, and 2H18 is forecast higher by 0.41 mb/d than the first half, averaging 58.83 mb/d.

Non-OPEC oil supply in 2017 and 2018
OECD
OECD liquids production in 2017 remains unchanged at 25.46 mb/d, indicating growth of 0.62 mb/d y-o-y. OECD Americas saw an upward revision by 16 tb/d, while OECD Europe’s supply estimation was revised down by 12 tb/d, leading to annual growth of 0.62 mb/d and 0.03 mb/d y-o-y, respectively. OECD Asia Pacific is expected to decline by 0.02 mb/d to average 0.40 mb/d in 2017.

For 2018, OECD supply is forecast to average 26.39 mb/d, representing growth of 0.93 mb/d, mainly from OECD Americas.

OECD Americas
OECD Americas’ oil supply in 2017 is predicted to average 21.23 mb/d, an increase of 0.62 mb/d y-o-y. The oil supply forecast was revised up by 16 tb/d this month owing to the upward adjustment of Canada’s production by 0.07 mb/d to 4.77 mb/d, breaking down in 3Q17 by 124 tb/d and also in 4Q17 by 160 tb/d. Oil supply in the US and Mexico was revised down by 0.01 mb/d and 0.04 mb/d, to average 14.22 mb/d and 2.23 mb/d, respectively.

In 2018, oil supply in OECD Americas is expected to grow by 0.88 mb/d to average 22.10 mb/d. The US and Canadian oil supply is expected to grow by 0.87 mb/d and 0.23 mb/d respectively, while a continuation of the annual decline in Mexico by 0.22 mb/d is anticipated for next year.

US
According to the EIA, monthly crude oil production averaged 9.20 mb/d in August 2017, representing a decrease of 31 tb/d from a month earlier. In August, US crude oil and total supply data showed a lower level, compared to preliminary US weekly reports.

Total US supply, excluding processing gains, declined by 0.04 mb/d to average 14.24 mb/d in August. US NGLs were down by 0.05 mb/d to average 3.71 mb/d, mainly from unconventional sources. Crude oil production increased m-o-m in North Dakota (+37 tb/d) to average 1,068 tb/d, Colorado (+32 tb/d) to average 374 tb/d, New Mexico (+14 tb/d) to average 462 tb/d and in Alaska oil output increased by 28 tb/d m-o-m to average 451 tb/d, while crude output in Texas following Hurricane Harvey and heavy flooding in parts of the Eagle Ford region declined by 108 tb/d m-o-m to average 3,366 tb/d, up by 213 tb/d from December 2016 and up by 196 tb/d y-o-y. Moreover, production in the Gulf of Mexico was also affected by Hurricane Harvey and declined by 66 tb/d to average 1,693 tb/d, whereby the eight-month average from January at 1,709 tb/d indicates growth of 112 tb/d compared to the same period a year earlier.

The US crude oil production forecast for 2017 was revised down by 0.01 mb/d to average 9.26 mb/d, and is now expected to grow by 0.40 mb/d y-o-y, while US NGLs output is expected to grow by 0.18 mb/d y-o-y, to average 3.69 mb/d. The annual output of other liquids, mainly biofuels, is expected at 1.27 mb/d, unchanged over the previous year. The US crude oil production in 2018 is expected to grow by 0.54 mb/d to average 9.80 mb/d, with growth of 0.31 mb/d anticipated for NGLs. US liquids supply in 2017 and 2018 is expected to increase by 0.59 mb/d and 0.87 mb/d, to average 14.22 mb/d and 15.09 mb/d, respectively. US Lower 48 states’ onshore crude oil output declined from a peak of 7.63 mb/d in March 2015 to 6.51 mb/d in December 2016, but gathered renewed momentum in 2017. In August 2017, it had grown by 537 tb/d over the December level to average 7.04 mb/d.

US tight oil production grew by 73 tb/d m-o-m to average 4.71 mb/d in August, surpassing the previous highest level of 4.70 mb/d in March 2015, according to estimated EIA tight crude data. Tight crude output from horizontal wells increased in the Permian by 0.05 mb/d to average 1.92 mb/d in August and for September preliminary data indicates an even higher level at 1.96 mb/d, while tight crude output in the Eagle Ford dropped by 0.02 mb/d to average 1.09 mb/d, following the heavy flooding caused by Hurricane Harvey. Monthly growth of 0.03 mb/d and 0.01 mb/d was reported in the Bakken and Niobrara shale to average 1.06 mb/d and 0.33 mb/d, respectively. Other regions either stagnated or experienced minor declines. Preliminary estimates of tight crude output in September indicate growth of 0.06 mb/d to average 4.77 mb/d.

Oil production in the US Gulf of Mexico decreased by 66 tb/d m-o-m, down to 1.69 mb/d in August, mainly due to the disruption in production in late August during Hurricane Harvey, and indicating average growth of more than 100 tb/d y-t-d.

Regarding tight crude estimation in 2017 and the next year, according to the latest assessment on new well productivity, production legacy and the active rigs in the shale and tight key regions, growth of 0.43 mb/d y-o-y to average 4.67 mb/d is expected for this year and for 2018 the forecast growth will be higher y-o-y at 0.62 mb/d, to average 5.29 mb/d, mainly due to the higher GDP growth in the US and expected better margins for shale producers following the recent positive trend in market momentum. The results of regionby-region analysis on an annual base, are presented.

US oil rig count
According to the Baker Hughes report for the week to 3 November 2017, the total US rig count has dropped by 11 units to 898 rigs (81.2% for oil and 18.8% for gas), w-o-w. The oil rig count is down by 8 units to 729 rigs, while the gas rig count decreased only by 1 unit to reach 189 rigs. 18 rigs were active offshore, mostly in the GoM.

On a monthly basis, the total US rig count dropped by 18 units to average 921 rigs, as on-land rigs decreased by 19 units m-o-m to average 901 rigs. Regarding monthly oil rigs, the count fell by 9 units to average 741 rigs, after dropping by 13 units in September. The US oil rig count in October was higher by 305 units, y-o-y, an increase of 70%. Gas rigs grew by 75 units to reach 180 rigs y-o-y, an increase of about 71%. In October, the Permian Basin is now home to nearly 51% of the active oil rigs with 381 rigs in the US, its highest contribution since basin-level data became available in early 2011. In the Williston Basin, in which the Bakken shale is located, 50 oil rigs were active in October (6.8% of total US oil rigs), in Eagle Ford 60 oil rigs (8.1%) and in DJ-Niobrara 25 oil rigs (3.4%).

As a result, at the end of October 2017, the US oil rig count for the last 17 months represents an increase of 420 oil rigs (+131%) since the rig count bottomed out in May 2016, equating to the addition of at least 24.7 rigs per month.

Onshore rigs (Land rigs) dropped by 9 units to 879 rigs for the week to 3 November 2017, up by 546 rigs y-o-y. The active rigs in offshore areas decreased by 2 units to 18 rigs compared to a week ago, lower by 3 units, y-o-y. 780 rigs out of 901 land rigs (87%) were active in the drilling of horizontal wells in October 2017.

In terms of the oil rig count in October compared to a month earlier in the most prolific Basins, rigs decreased by 2 units in the Permian Basin to average 381 rigs and dropped 2 units in the Eagle Ford to 60 rigs. In Niobrara and the Williston Basin, the number of oil rigs decreased by 3 units and 1 unit to total 24 and 50 oil rigs, respectively.

Canada
Canada’s liquids output in July increased by 0.24 mb/d m-o-m to average 4.83 mb/d, still 0.21 mb/d below the peak reached in February of 5.04 mb/d. July’s output was higher by 0.31 mb/d, y-o-y. Oil production recovered within four months of the wildfires in 2016, whereas production has not yet recovered from this year’s wildfire in the Syncrude Mildred Lake plant in mid-March. Non-conventional liquids output including oil sands increased by 0.2 mb/d m-o-m to average 2.73 mb/d, while the average output in January and February 2017 before the wildfire was 2.85 mb/d. Preliminary production data in August shows that the output level has not reached this level yet, although the 350 tb/d Mildred Lake plant was expected to return to full production by August. Moreover, the Hangingstone project was expected to start up in early August. The project, located in Alberta, consists of steam-generating equipment, well pad facilities, 32 well pairs, water treatment services and bitumen flowlines. It is expected to reach a peak production rate of approximately 20 tb/d in 2018.

Conventional crude oil declined in July by 26 tb/d to average 1.19 mb/d, which is 26 tb/d lower over the average output in 1H17, while NGLs production in July increased by 69 tb/d to reach 0.91 mb/d. Liquids output for 2Q17 was revised down while 3Q17 and 4Q17 were revised up following preliminary indications on the back of the new oil sands projects development. Some upgraders underwent maintenance in 3Q17, such as Scotford in July and Horizon starting in September.

Canada shows the greatest supply growth potential for 4Q17 start-ups. Resources coming online have doubled this year, compared to last year. The main contributor is Fort Hills Phase 1, scheduled to begin producing oil by the end of 2017. Plateau liquids production is estimated at 171 tb/d. CNRL’s Horizon phase 3 with 876 mb of recoverable resources will contribute the most to 2017 production and the asset is expected to reach a production plateau of 72 tb/d of liquids by 2020. It is also expected that the Hebron offshore field will start oil production in mid-December by ExxonMobil. The plateau liquids production from Hebron is estimated at 123 tb/d.

Total Canadian oil supplies based on actual production data despite all disruptions owing to the wildfires are forecast to grow by 0.26 mb/d y-o-y supported by new volumes coming online in 2017 to average 4.77 mb/d, indicating an upward revision of 0.07 mb/d compares to last month’s assessment.

For 2018, the forecast has been also revised up by 0.04 mb/d to average 4.99 mb/d, showing growth of 0.23 mb/d, y-o-y.

Mexico
Mexican oil production fell by 0.20 mb/d m-o-m in September to average 2.00 mb/d, lower y-o-y by 0.42 mb/d. This drop was due to a drop of 200 tb/d m-o-m in crude oil output to average 1.73 mb/d, mainly following a deep decline from the Ku-Maloob-Zaap field, where output fell y-o-y by 0.15 mb/d, on later-than-scheduled maintenance owing to the consecutive hurricanes in the GoM.

The lower oil production from other mature fields such as Cantarell and Chuc have already impacted the Mexican oil output compared to a year ago. Preliminary liquids output in October is expected to rise to 2.22 mb/d. Following a downward adjustment to the production forecast of 3Q17 and 4Q17, the annual output was revised down by 0.04 mb/d compared to the previous forecast to average 2.23 mb/d, showing a contraction of 0.23 mb/d, y-o-y.

Based on these changes, the quarterly decline trend and the productivity performance, the forecast for 2018 has also been adjusted down by 0.05 mb/d to average at 2.01 mb/d, showing an annual decline of 0.22 mb/d.

OECD Europe
Actual OECD Europe’s oil supply was down by 0.07 mb/d m-o-m in September to reach 3.61 mb/d, while this was higher by 0.30 mb/d y-o-y. Hence, total oil output in 3Q17 stood at 3.69 mb/d, despite declining by 0.11 mb/d q-o-q, but was higher y-o-y by 0.05 mb/d. Production in Norway declined in September m-o-m while oil output grew in the UK and other OECD Europe.

For 2017, the region is estimated to grow by 0.03 mb/d to average 3.84 mb/d and for 2018 as well, to average 3.86 mb/d. Although production in Norway and Denmark is expected to decline, this will be offset by growth in the output of the UK.

Norway
According to Norwegian Petroleum Directorate (NPD) data, preliminary production figures for September 2017 show average production of 1.77 mb/d of oil, NGL and condensates, a decrease of 0.17 mb/d compared to the previous month due to maintenance work on some fields. Average liquids production in September comprised of 1.44 mb/d for oil, down by 0.12 mb/d m-o-m and 0.33 mb/d for NGLs and condensate, a drop of 0.08 mb/d m-o-m. However, oil production in September 2017 was about 11% below the NPD’s prognosis for the month, but higher by 0.16 mb/d, or 10%, y-o-y.

As a result, Norwegian oil supply in 3Q17 reached 1.90 mb/d, a q-o-q decline of 0.1 mb/d, but remains unchanged compared to the same quarter a year ago.

The oil supply forecast for 2017 was revised down by 0.01 mb/d due to weaker-than-expected output in 3Q17 to average 2.01 mb/d for the year, and estimated to grow by 0.02 mb/d, y-o-y.

For 2018, a contraction of 0.03 mb/d is expected following a downward adjustment in all quarters by 30 tb/d, to reach an average of 1.98 mb/d.

UK
UK liquids production rebounded in September to increase by 0.08 mb/d m-o-m to average 1.01 mb/d, after dropping 0.03 mb/d in August. Therefore, 3Q17 saw a decline of 0.05 mb/d q-o-q to average 0.99 mb/d, up by 0.02 mb/d y-o-y. UK oil supply over the first three quarters doesn’t show any changes in terms of growth compared to the average annual supply in 2016 at 1.03 mb/d.

However, October and 4Q17 liquids supply are expected at higher level over 3Q17. As mentioned in the last MOMR, production is nevertheless expected to increase in the coming months to the end of the year through the ramping up of new fields, such as Quad 204 and Kraken as well as from the 9 tb/d Arundel field, the 40 tb/d Western Isles project and the 60 tb/d Catcher project start-up.

The UK’s overall oil production in 2017 is predicted to grow by 0.01 mb/d y-o-y to average 1.04 mb/d, a downward revision of 0.01 mb/d in terms of annual growth, due to lower-than-expected volumes due to the heavy and continuous maintenance in 3Q17. For 2018, y-o-y growth of 0.07 mb/d is expected as new projects will bring a total of 0.16 mb/d onstream in the UK.

Developing Countries
The total oil supply of developing countries (DCs) is estimated to grow by 0.06 mb/d y-o-y, to reach an average of 11.96 mb/d in 2017, revised down by 26 tb/d due to the downward revision in 4Q17, mainly in Latin America. Preliminary data for developing countries shows oil supply at 12.02 mb/d for October, and the 4Q17 higher at 12.06 mb/d compared to the previous quarters, and also higher by 0.03 mb/d y-o-y. For 2018, Developing Countries’ supply is forecast to grow by 0.08 mb/d y-o-y to average 12.03 mb/d, revised down by 0.02 mb/d from the last MOMR.

Oil supply from Other Asia is expected to decline by 0.08 mb/d and 0.05 mb/d in 2017 and 2018 to average 3.64 mb/d and 3.59 mb/d, respectively.

In Africa, a production increase of 0.06 mb/d – primarily from Ghana and Congo – is expected for 2017, to average 1.85 mb/d and for 2018, growth is expected at a slower pace by 0.04 mb/d to average 1.90 mb/d.

Non-OPEC oil production in the Middle East region is predicted to decline by 0.04 mb/d and 0.05 mb/d in 2017 and 2018, averaging 1.24 mb/d and 1.19 mb/d, respectively.

Latin America
Oil production in Latin America was revised down by 0.02 mb/d and is expected to increase by 0.12 mb/d to average 5.23 mb/d in 2017. The main driver will be Brazil to show growth of 0.18 mb/d.

Other countries in the region will witness declines, except Trinidad and Tobago, which shows steady production levels compared to last year.

Colombia’s oil production stood at 0.88 mb/d in September, unchanged from the previous month and a year ago. Production in Colombia is expected to fall by 0.03 mb/d and 0.04 mb/d in 2017 and 2018, respectively.

Although oil output is expected to decline in Argentina this year, growth of 0.02 mb/d y-o-y for the next year is anticipated to average 0.68 mb/d.

Brazil
According to national sources, Brazil’s liquids output declined by 0.06 mb/d m-o-m in August to 3.25 mb/d, to stand at the same level, y-o-y. A 47 tb/d m-o-m decline in crude output led to the lowering of crude supply to average 2.58 mb/d. This was a result of maintenance and unplanned outages. According to Petrobras, preliminary data in September shows liquids supply to rise by 0.06 mb/d to average 3.31 mb/d, including 2.64 mb/d of crude. Crude oil output from the Santos Basin – mainly from pre-salt reservoirs – is expected to rise by 0.18 mb/d. However, the growth in Santos is usually offset by declines from post-salt reservoirs in the Campos Basin and other mature onshore fields.

Brazil’s three-quarter average crude oil output was higher by 0.11 mb/d at 2.62 mb/d compared to the same period a year earlier, while this average indicates growth of 0.16 mb/d compared to the 2016 annual average liquids output (including biofuels and NGLs). The reason for this mild growth was mainly due to the lasting maintenance at platforms in both drilling regions of post-salt and pre-salt, as well as the heavy decline reported from post-salt reservoirs in the Campos Basin. Oil production in Lula, the largest offshore field in Brazil, reached an average of 0.8 mb/d in September while the y-t-d average indicates 0.72 mb/d, showing growth of 0.19 mb/d from 2016.

Brazil’s annual oil supply forecast in 2017 was revised down by 31 tb/d, due to lower-than-expected output in 3Q17, to average 3.29 mb/d, and also owing to the downward adjustment in the forecast of 4Q17 which is now expected to grow by 0.18 mb/d y-o-y to average 3.32 mb/d. The total supply forecast for 2018 was also revised down owing to the base change in 2017, with forecast growth of 0.20 mb/d at an average supply of 3.52 mb/d.

FSU
FSU’s oil supply is estimated to grow by 0.08 mb/d in 2017 to average 13.94 mb/d, unchanged from the October MOMR. Total FSU liquids production in 3Q17 declined by 0.1 mb/d q-o-q to average 13.80 mb/d. Preliminary data indicates marginally higher production in October at 13.85 mb/d.

Oil production in Russia, Azerbaijan and FSU others is estimated to contract by 0.1 mb/d in 2017, while oil supply from Kazakhstan will grow by 0.18 mb/d, to average 1.74 mb/d.

For 2018, output is forecast to decline by 0.01 mb/d, to average 13.93 mb/d, unchanged from the previous month’s assessment. Other countries in the region will also see declines, except Kazakhstan.

Russia
Preliminary Russian liquids output in October increased by 0.02 mb/d m-o-m to average 10.95 mb/d as most of the maintenance was completed at the end of September. This output was below the required level of 10.98 mb/d agreed in Declaration of Cooperation with OPEC and other non-OPEC participants. The average oil output of Russia, including NGLs, in 3Q17 at 10.95 mb/d was also below this level, according to the Ministry of Energy. Moreover, Russia’s liquids output in 2Q17 indicates an average of 10.99 mb/d, which represents a drop of 0.26 mb/d over 1Q17, and output in 3Q17 compared to 1Q17 indicates a drop in production by 300 tb/d.

According to the latest assessment, Russian oil production in 2017 is expected to decline by 0.04 mb/d to average 11.04 mb/d, unchanged compared to the last month’s assessment. For 2018, a contraction of 0.01 mb/d is forecast.

Caspian
In Azerbaijan, according to data provided by the Ministry of Energy, oil production increased by 0.05 mb/d m-o-m, averaging 0.80 mb/d in September, higher by 0.01 mb/d, y-o-y. Oil production in 3Q17 declined by 0.02 mb/d q-o-q to average 0.79 mb/d. A contraction of 0.06 mb/d and 0.05 mb/d is anticipated for Azeri oil production in 2017 and 2018, to average 0.79 mb/d and 0.74 mb/d, respectively.

Kazakhstan’s liquids production increased by 0.05 mb/d m-o-m to average 1.72 mb/d in September. While crude oil increased m-o-m by 54 tb/d to 1.45 mb/d, NGLs output remained steady at 0.27 mb/d.

Kazakh oil output rose in the first nine months of the year by 0.16 mb/d over the same period a year earlier.

China
China’s oil supply increased by 0.02 mb/d in September to 3.93 mb/d, including 3.78 mb/d of crude oil, according to data released by the Chinese National Bureau of Statistics. Average crude oil production for the first 9 months of 2017 declined by 0.11 mb/d compared with the same period a year earlier. Upstream investments in oil and gas projects have not seen sustained improvements so far this year, according to the latest report issued in July by the Ministry of Land and Resources. In 2016, approximately $30 billion was spent on exploration and development of oil and gas in China.

Chinese oil output was revised up by 0.01 mb/d in 2017, following higher-than-expected production and is now forecast to decline by roughly 0.11 mb/d in 2017. The forecast for 2018 was also revised up by 0.02 mb/d to average 3.83 mb/d, showing a y-o-y contraction of 0.15 mb/d.

OPEC NGLs and non-conventional oils
The forecast for OPEC NGLs and non-conventional liquids in 2017 was unchanged from the previous assessment, averaging 6.31 mb/d and representing growth of 0.17 mb/d.

In 2018, due to a number of planned projects, growth of 0.18 mb/d y-o-y is anticipated, with average output at 6.49 mb/d. These projects are expected to be mainly in IR Iran and Saudi Arabia.

OPEC crude oil production
According to secondary sources, total OPEC-14 crude oil production averaged 32.59 mb/d in October, a decrease of 151 tb/d over the previous month. Crude oil output increased in Angola, Libya and Saudi Arabia, while production showed declines mainly in Iraq, Nigeria, Venezuela, Algeria and Iran.

World oil supply
Preliminary data indicates that global oil supply increased by 0.53 mb/d to average 96.71 mb/d in October 2017 compared with the previous month. Preliminary October supply data shows an increase in non-OPEC supply (including OPEC NGLs) by 0.68 mb/d to average 64.12 mb/d. This was mainly driven by Mexico, Norway, UK, Brazil, Canada, Malaysia and China, which partially offset m-o-m declines in the US and Ghana. OPEC crude oil production declined by 0.15 mb/d in October, leading to a decrease in global oil output.

The share of OPEC crude oil in total global production fell slightly by 0.3 pp to total 33.7% in October, compared with 34.0% in the previous month. Estimates are based on preliminary data from direct communication for non-OPEC supply, OPEC NGLs and non-conventional oil, while estimates for OPEC crude production are based on secondary sources.

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