Non-OPEC oil production growth is set to slow in 2019: IEA

By  Trend

Non-OPEC oil production growth is set to slow in 2019, Trend reports citing the International Energy Agency (IEA).

Global oil supply fell by 950,000 barrels per day (b/d) in December, led by lower OPEC output ahead of new supply cuts, IEA said in its Oil Market Report.

“At 100.6 million (mb/d), supply was up 2.8 mb/d on a year ago. Following annual gains of a record 2.6 mb/d in 2018, non-OPEC production growth is set to slow to 1.6 mb/d in 2019,” the report reads.

This is while OPEC crude oil output dropped by 590,000 b/d in December, to 32.39 mb/d, according to IEA estimates.

Saudi Arabia cut back from record highs while Iran and Libya saw further losses. OPEC production is set to fall further in January, when new Vienna Agreement cuts take effect, according to the report.

As for the demand, IEA believes that there is a mixed picture.

“Falling prices in 4Q18 helped consumers and there are signs that trade tensions might be easing. In many developing countries, lower international oil prices coincide with a weaker dollar as the likelihood of higher US interest rates fades for now. However, the mood music in the global economy is not very cheerful. Confidence is weakening in several major economies,” said the report.

In the short term, there is added uncertainty about oil demand due to the onset of the northern hemisphere winter season, with low temperatures seen in the past few days in many places, according to IEA.

For now, IEA retains its view that demand growth in 2018 was 1.3 mb/d, and this year it will be slightly higher at 1.4 mb/d, mainly due to average prices being below year-ago levels.

During a meeting of oil producers in Vienna in December 2016, 11 non-OPEC countries (including Azerbaijan) agreed to reduce oil production by 558,000 barrels per day.

The agreement was concluded for the first half of 2017 and was extended at a meeting on May 25, 2017 until the end of the first quarter of 2018. The agreement was renewed again until the end of 2018 at the recent OPEC meeting in Vienna. Azerbaijan joined the decision.

During the 4th OPEC and non-OPEC Ministerial Meeting, an agreement was reached to increase oil production by one million barrels per day. Azerbaijan supported the new agreement.