OPEC said today that oil production by countries outside the exporters’ cartel was now expected to rise in 2017, revising its previous expectations of a drop.
In its monthly report, the Organization of the Petroleum Exporting Countries said Kazakhstan, Norway and Britain were now all expected to produce more next year than forecast earlier.
This means production outside the cartel is expected to rise by 200,000 barrels per day, against previous projections of a 150,000 b/d decline. Global oil demand is projected to continue growing.
For 2016, non-OPEC oil supply is still projected to contract, by 610,000 barrels per day, a drop however slightly smaller than previously expected.
“This has been mainly due to a lower-than-expected decline in US tight oil and a better-than expected performance in Norway, as well as the early start-up of Kashagan field in Kazakhstan,” OPEC said.
OPEC, which does not forecast supply by its own 14 members, said it saw world oil demand growth rising by 1.23 million b/d this year.
World oil demand is also expected to rise in 2017, it added. “The main growth centres for next year continue to be India, China and the US,” the report said.
Oil prices tumbled again today in Asian trade on a pick-up in drilling and a strong dollar as speculation swirled that the US Federal Reserve could hike interest rates as soon as this month.
Producers have been hurt by plunging oil prices for around two years due to a stubborn supply glut.
Crude prices have been slashed from around $100 in mid-2014 to 13-year lows of below $30 at the start of this year.
Traders are now fixed on a meeting of OPEC countries and non-cartel member Russia in Algeria later this month.
Some producers hope the talks will lead to a freeze in production that would boost oil prices.
Officials from Russia and OPEC kingpin Saudi Arabia have sought to soothe concerns ahead of the talks in Algiers.
A previous attempt at a production cap in April was derailed by Iran, which refused to join in talks as it ramps up output after the lifting in January of years of nuclear-linked sanctions.
Iran briefly triggered a spike in prices late last month when it announced it would participate in the meeting.