OPEC Improves 2015 Forecast for Global Oil Demand

A record drop in oil prices will not only cut investment plans of the largest oil companies, but also slow down the growth in actual production volumes this year, according to the updated OPEC forecast. In the new report, the estimate of the increase in oil supply on the world market has been reduced by more than 400 thousand barrels per day. In addition to the expected drop in shale production in the US in the third quarter, prices should be supported by a reduction in supplies from Russia and a number of smaller miners.

According to the February forecast of OPEC, the supply on the oil market from non-cartel countries this year will increase only by 850 thousand barrels / day - to 57,09 million barrels / day, which is 420 thousand barrels / day less than expected in January. The greatest adjustments were in production forecasts in the United States (minus 130 thousand), Colombia (minus 80 thousand) and Russia (minus 70 thousand barrels / day). In the Russian Federation, this decline in production (to 10,5 million barrels per day) will be more significant than in the entire Middle East (minus 60 thousand barrels per day), they are now expected in OPEC. The cartel does not traditionally provide information on its own production (formally, the volume of quotas is 30 million barrels / day), but, according to sources, the supply of OPEC countries in January decreased by 53 thousand to 30,15 million barrels / day.

As for the global demand for oil, on the contrary, it is somewhat improved: the increase this year will be 1,17 million barrels / day (plus 20 thousand barrels / day compared to January). “Since, unlike 2008 of the year, the decline in prices was due to an oversupply, cheap oil is likely to spur the growth in demand for energy,” explain the organization. Recall that in the 2008 – 2009 years, it was OPEC quota reduction that ensured a rapid recovery in prices. Yesterday's publication of the new forecast somewhat increased the cost of oil - the price of Brent kept above $ 59 per barrel.

Among the main reasons for the decline in production expectations at OPEC are the fall in the number of drilling rigs in the United States and a reduction in investment in production, as almost all major oil companies, including Royal Dutch Shell (by $ 15 billion), BP (by $ 5 billion), said Total (announced a reduction in capex by one-third), Chevron and ConocoPhillips. However, shale oil production in the United States is still increasing (in January it was about 8,7 mln barrels per day) - despite the reduction in the number of drilling rigs. Thus, according to the oil service company Baker Hughes, their number from a peak in early October (1551 installation) decreased in January to 1263. But this did not reduce production, since the lag between the start of drilling and the depletion of the field is at least three months, according to OPEC.

OPEC predicts that the volume of production outside the cartel will begin to decline already in the second quarter of this year, mainly due to traditional mining. In the third quarter, the volume of oil shale production in the United States will begin to decline (however, the drop will not exceed 50 thousand barrels / day), which will limit the increase in the year to 820 thousand barrels / day (last year it was 1,6 million barrels / day).

Tatyana Edovina, Kommersant