OPEC points to larger 2017 oil surplus as rivals keep pumping
OPEC revised up its 2016 and 2017 non-OPEC supply forecasts, citing factors including the start up of Kazakhstan's Kashagan oilfield and a lower-than-expected decline in U.S. shale output, and said the immediate outlook was for more production.
"It is expected that there will be higher non-OPEC production in the second half of 2016 compared to the first half," OPEC said in the report.
OPEC expects non-OPEC supply to rise by 200,000 bpd in 2017, versus a previously forecast 150,000 bpd decline. The revision is mostly due to Kashagan, OPEC said, as the long-delayed giant field finally starts up.
On top of that, the forecast for this year was revised up by 180,000 bpd.
OPEC itself kept output near a multi-year high in August, pumping 33.24 million bpd, according to figures OPEC collects from secondary sources, down 23,000 bpd from July's figure, the report said.
The July figure is the highest since at least 2008, according to a Reuters review of past OPEC reports.
Near-record OPEC output, and higher supply from outside, could make it harder for OPEC and Russia to come up with steps to support the market. Producers are expected to meet in Algeria on the sidelines of the Sept. 26-28 International Energy Forum.
An attempt by producers to agree to a production freeze in April failed as Iran, wanting to boost oil exports that had been restrained by Western sanctions, refused to join and Saudi Arabia insisted all producers took part.
The August output figures in the report at least show no further large supply increases in top OPEC producers. As previously reported, Saudi Arabia told OPEC it reduced output by 40,000 bpd from July's record high of 10.67 million bpd.
At the start of 2016, OPEC expected the rebalancing to happen this year.
With demand for OPEC crude in 2017 expected to average 32.48 million bpd, the report indicates there will be an average surplus of 760,000 bpd if OPEC keeps output steady. Last month's report pointed to a small, 100,000 bpd surplus.
OPEC points to larger 2017 oil surplus as rivals keep pumping | Reuters