Tuesday , September 21 2021

Learn about OPEC's production quota in October 2018 and demand expectations for 2019

Bloomberg said in a report that US oil production rose to a record level of 11.6 million barrels per day after rising 400 thousand barrels per day during the week ending November 2, 2018.

The number of drilling platforms in the United States rose at the fastest pace since May 2018 during the week ended November 9, 2018, up 12 drill holes to a total of 886 platforms.

At the same time, the International Energy Agency (IEA), in its long-term view, emphasizes the growing threat posed by electric cars and clean fuels to demand transportation fuels.

However, in the long run, the world can see a supply crisis if investment is not sufficient to expand oil production facilities, the agency said.

The increase in long-term demand will be driven by the industrial and petrochemical sectors, according to the IEA report.

On the supply side, the Joint Committee of Ministers of Member States and non-OPEC members said that 2019 could continue to record supply growth and that a slowdown in global economic growth could lead to widening gaps between supply and demand.

Bloomberg notes that despite the above, producers collectively announced that they will see how new trends in the oil market develop before the final production policy plan for 2019 is made.

OPEC average production rose for the fifth consecutive month in October 2018 and hit a 23-month high of 33.33 million bpd, a monthly increase of 430,000 bpd, according to Bloomberg data.

However, the production growth rate according to OPEC secondary sources is far lower at the level of 127 thousand barrels per day to 32.9 million barrels per day.

Libya recorded the largest monthly production increase, with output now at the highest level in five and a half years at 1.22 million bpd, according to Bloomberg data.

Saudi Arabia added 150,000 barrels per day (bpd) for a month, with an average production of 10.68 million bpd, the highest level recorded by the kingdom, according to Bloomberg data.

OPEC average production has increased by more than 1.5 million bpd since May 2018, with Saudi Arabia alone adding half of the increase or 0.71 million bpd.

The UAE also raised its production rate by 80,000 bpd to a two-year high of 3.12 million barrels per day, while Iran's marginal production fell to 3.4 million bpd, although OPEC's secondary source for Iranian production was estimated at 3.3 million bpd in October 2018.

As a result of increased OPEC production, commitment to PSA fell to 104 percent in October 2018 from 111 percent in September 2018.

The forecast for world oil demand growth for 2018 has been reduced again, according to OPEC's latest monthly report of 40,000 bpd.

Total demand is expected to increase by 1.5 million bpd to 98.79 million bpd in 2018.

This correction was mainly due to a slower-than-expected decline in demand data for the Middle East, China and other Asian regions for the third quarter of 2018, offsetting the high growth forecast for the OECD region of 50,000 barrels per day.

Within the OECD region, demand remains strong in parts of the US and is the main reason for increasing expectations.

According to monthly data until August 2018 and preliminary data for September and October 2018, demand trends in the United States show strong growth compared to the first 10 months of this year.

The main drivers of this growth are petrochemical raw materials such as liquefied natural gas (LNG), liquefied natural gas (LNG), diesel in the industrial sector, jet fuel and kerosene.

Demand for gasoline remains weak due to higher retail prices as well as profits from high efficiency in the transportation sector because the August 2018 data show that year-on-year growth remains flat despite marginal growth in car sales during the month.

On the other hand, the demand trend remains weak for OECD countries compared to historical levels because demand in four major countries (Britain, Germany, Italy and France) declined in August 2018, offset by increasing demand in Spain, the Netherlands, Turkey, Poland and a number of other countries. Area.

In terms of demand for products from the beginning of 2018 to date, strong demand for gasoline, jet fuel, kerosene, liquefied natural gas (LPG) and demand for waste oil, are partially offset by lower demand for diesel and naphtha.

In addition, demand trends in these regions are expected to remain constant throughout the year, despite expectations for heating fuel needs in the fourth quarter of 2018, perhaps the modest expectations for a warmer increase than expected. Demand data for the Middle East was cut by 50,000 barrels per day (bpd), driven mainly by declining growth in demand by Saudi Arabia, which was influenced by high efficiency and alternative fuels.

China's demand forecast was cut by 30,000 bpd for the third quarter of 2018.

Estimates of world oil demand growth for 2019 are reduced by 70,000 barrels per day on the back of revised demand figures outside the Organization for Economic Cooperation and Development (OECD) region due to ongoing developments in the global economy.

Demand is now expected to grow by 1.29 million barrels per day to 100.08 million barrels per day.

On the supply side, world oil supply rose 0.44 million barrels per day in October 2018, averaging 99.76 million barrels per day, according to preliminary data, against a background of higher production from OPEC producers (+ 0.13 million barrels per day) and non-OPEC countries + 0.3 million barrels per day).

For the full year 2018, the estimated supply for non-OPEC countries is adjusted by 0.09 million barrels per day (bpd) and is now estimated at 62.09 million barrels per day.

Expectations for the US, Russia, Kazakhstan and Thailand increased by 0.24 million barrels per day, offsetting the decline of 0.14 million bpd by Mexico and Norway the United Kingdom, Brazil and China.

In terms of regional growth, OECD oil supply estimates increased by 117,000 barrels per day on the back of higher expectations for OECD countries, while European countries from the Organization for Economic Cooperation Development shrank.

At the estimate for 2019, the growth rate of non-OPEC oil supply has been adjusted and increased by 0.12 million barrels per day, the total supply is now expected to reach 62.09 million barrels per day after rising by 2.23 million barrels per day.

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