Despite disruptions from hurricanes in September, US output continued to grow
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September saw an expansion in the world’s oil supply as US production growth persisted against signs of rebalancing in the global markets, according to a new report.
The latest monthly report from the International Energy Agency (IEA) said that global oil output in September rose by 90,000 barrels a day compared to August, according to the Wall Street Journal. That brought last month’s production to 97.5 million barrels a day, representing an increase of 620,000 barrels a day over the same period last year.
The report noted that in spite of disruptions from the hurricane season, the US continued to be a main driver of production. Output in the North Sea and Kazakhstan also contributed significantly.
“Well completions at US shale oil fields have picked up from the low levels seen at the start of the year, so that even though new rig additions have stalled, output continues its upward trend,” the IEA said.
In contrast, the IEA estimated that OPEC’s contribution rose marginally by 10,000 barrels per day in September, reaching 32.65 million barrels a day. OPEC had earlier reported its output for the month as 32.75 million barrels per day, noting that Libya and Nigeria increased their production as their oil industries had been hurt by civil unrest. Compared to last year, OPEC’s output was 400,000 barrels a day lower.
There is “little doubt that the leading producers have re-committed … to support the long process of rebalancing,” the IEA said.
Efforts to ease the global oil glut and lift prices started nearly a year ago when OPEC and certain other producers, including Russia, agreed they would limit production at about 1.8 million barrels a day less than peak levels in October 2016. That commitment has started to pay off as oil prices rose steadily in recent months, with support from strong demand.
The supply-cut agreement will lapse in March, but there have been indications that Saudi Arabia, OPEC’s largest member, and Russia are open to an extension, according to the Journal.
Looking at commercial inventories in the Organization for Economic Cooperation and Development — which is comprised of industrialized, oil-consuming countries — the IEA noted a decline of 14.2 million barrels in August, ending 170 million barrels over OPEC’s target of the past five-year average.
The report also said that global oil demand decelerated in the third quarter as storms that hit the US gulf coast led to refinery outages. The IEA stood pat on its full-year demand growth forecast of 1.6 million barrels per day, however, based on an anticipated fourth-quarter pickup in demand.
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The latest monthly report from the International Energy Agency (IEA) said that global oil output in September rose by 90,000 barrels a day compared to August, according to the Wall Street Journal. That brought last month’s production to 97.5 million barrels a day, representing an increase of 620,000 barrels a day over the same period last year.
The report noted that in spite of disruptions from the hurricane season, the US continued to be a main driver of production. Output in the North Sea and Kazakhstan also contributed significantly.
“Well completions at US shale oil fields have picked up from the low levels seen at the start of the year, so that even though new rig additions have stalled, output continues its upward trend,” the IEA said.
In contrast, the IEA estimated that OPEC’s contribution rose marginally by 10,000 barrels per day in September, reaching 32.65 million barrels a day. OPEC had earlier reported its output for the month as 32.75 million barrels per day, noting that Libya and Nigeria increased their production as their oil industries had been hurt by civil unrest. Compared to last year, OPEC’s output was 400,000 barrels a day lower.
There is “little doubt that the leading producers have re-committed … to support the long process of rebalancing,” the IEA said.
Efforts to ease the global oil glut and lift prices started nearly a year ago when OPEC and certain other producers, including Russia, agreed they would limit production at about 1.8 million barrels a day less than peak levels in October 2016. That commitment has started to pay off as oil prices rose steadily in recent months, with support from strong demand.
The supply-cut agreement will lapse in March, but there have been indications that Saudi Arabia, OPEC’s largest member, and Russia are open to an extension, according to the Journal.
Looking at commercial inventories in the Organization for Economic Cooperation and Development — which is comprised of industrialized, oil-consuming countries — the IEA noted a decline of 14.2 million barrels in August, ending 170 million barrels over OPEC’s target of the past five-year average.
The report also said that global oil demand decelerated in the third quarter as storms that hit the US gulf coast led to refinery outages. The IEA stood pat on its full-year demand growth forecast of 1.6 million barrels per day, however, based on an anticipated fourth-quarter pickup in demand.
For more of Wealth Professional's latest industry news, click here.
Related stories:
Added oil angst expected from hurricanes
Are Canadian investors ready to give up oil?
