Non-OPEC supply growth for 2015 is projected at 830,000 bpd whilst OPEC’s own output is set to shrink in the second half of the year, according to the latest projections by the International Energy Agency (IEA).
The figure published in its May Oil Market Report (OMR) shows a rise of 200,000 bpd since publication of the Agency’s April OMR, giving rise to the notion that OPEC’s grip on world markets may be loosening.
“The May OMR projects global oil demand growth at 1.1 million bpd for 2015, to 93.6 million bpd, up from 0.7 million bpd in 2014. The forecast is unchanged since last month as an improving economic outlook for Europe and a cold winter lift projections of OECD demand but only offset reduced expectations for the former Soviet Union, the Middle East and Latin America,” the IEA stated.
"The increase in non-OPEC supply, however, has meant that demand for OPEC supplies is expected to be weaker by a magnitude of some 300,000 bpd for the second half of this year, down to 30 million bpd"
The IEA, which represents the world’s most developed countries said that at 95.7 million bpd, total oil supplies were flat from March as higher OPEC output offset a drop in non-OPEC production.The latest report also highlighted how global oil supply growth is expected to remain at a steep 3.2 million bpd on a year-on-year basis in April despite a slowing down of light tight oil from the US.
OPEC crude supply rose by 160,000 bpd to 31.21 million bpd in April – the highest since September 2012, and nearly 1.4 million bpd above a year earlier.
The key reasons for the increase was down to both Iraq and Iran boosting output and current swing producer Saudi Arabia maintaining flows at above 10 million bpd.
The increase in non-OPEC supply, however, has meant that demand for OPEC supplies is expected to be weaker by a magnitude of some 300,000 bpd for the second half of this year, down to 30 million bpd.