Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Oil

OPEC analysis shows full output cut commitment needed to keep oil market balanced

Oil | Crude Oil | Shipping | Storage | Tankers

'Cheap oil' takes VLCC freight for a bull ride on floating storage play

Oil

Platts Market Data – Oil

Capital Markets | Commodities | Oil | Crude Oil | Refined Products | Fuel Oil | Gasoline | Jet Fuel | Naphtha | Marine Fuels | Equities | Financial Services | Banking | Non-banks | Private Markets

North American Crude Oil Summit, 3rd annual

Petrochemicals

Factbox: Post-consumer bottle bale supply falls as drop-off centers close amid coronavirus fears

OPEC analysis shows full output cut commitment needed to keep oil market balanced

Highlights

Q1 2020 demand for OPEC crude to average 29.13 million b/d

OPEC produced 29.55 million b/d of crude in November

2020 global oil demand, non-OPEC supply forecasts steady

London — OPEC will need tight discipline with its new, more stringent production quotas in the first quarter of 2020 if it wants to keep the oil market balanced and prevent prices from sliding, the bloc's latest analysis suggests.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

OPEC, Russia and nine other allies last week ratified new output caps for the first three months of next year, with OPEC agreeing to slash 372,000 b/d of production.

The supply curbs reaffirmed the coalition's "continuing commitment to oil market stability," OPEC said in its closely watched monthly oil market report Wednesday, which estimated that global demand for OPEC crude will tumble to 29.13 million b/d in the first quarter.

That compares to OPEC's November production of 29.55 million b/d, according to the report.

OPEC would need near-100% compliance with its cuts for its production not to exceed that level and cause market oversupply.

The second quarter looks even more challenging for OPEC, with demand for its crude forecast to drop to 28.88 million b/d.

At that level, OPEC will need Saudi Arabia to follow through on its pledge to overcomply with its quota and hold its output to 9.74 million b/d, well under November production of 9.85 million b/d. The kingdom has said it will only do so if compliance among all members is total.

OPEC and its allies plan to meet March 5-6 in Vienna to review their production cut agreement, which is scheduled to expire at the end of that month.

US GROWTH UNCERTAINTY

For full-year 2020, OPEC left its forecasts of global oil demand and non-OPEC supply unchanged from its projections last month.

Demand will reach 100.88 million b/d in 2020, up 1.08 million b/d from 2019.

Non-OPEC supply, meanwhile, will rise to 64.46 million b/d in 2020, up 2.17 million b/d from 2019, driven by gains in the US, Brazil, Canada and Norway, OPEC said. The report acknowledged, however, that its forecast "remains subject to some uncertainties, including the degree of spending discipline by US independent oil companies."

OPEC Secretary General Mohammed Barkindo told reporters last month that US shale companies have told him to expect US production growth next year at a relatively subdued 300,000-400,000 b/d. However, the OPEC report pegged US tight crude growth at 970,000 b/d for 2020.

Oil inventories in OECD countries fell in October, the most recent month for which data is available, to 2.933 billion barrels, the report stated. That is still some 33 million barrels above the five-year average that OPEC has said it is targeting.

GAINERS AND DECLINERS

OPEC's November production of 29.55 million b/d was down 193,000 b/d from the month prior, largely due to Saudi Arabia dialing back its October surge, which replenished its inventories following the September attacks on its Abqaiq and Khurais facilities.

The kingdom self-reported November output of 9.89 million b/d, while the secondary sources used by OPEC to monitor production estimated it at an average of 9.85 million b/d.

Angola also saw a major fall, with secondary sources estimating an 80,000 b/d month-on-month fall to 1.28 million b/d, while it self-reported a 120,000 b/d fall to 1.27 million b/d.

Iraq, OPEC's second-largest producer, pumped 4.64 million b/d, down 60,000 b/d month on month, according to secondary sources. It self-reported 4.60 million b/d.

Sanctions-hit Iran's production declined to 2.10 million b/d, secondary sources estimated. It did not self-report a figure.

Venezuela, also struggling under US sanctions, self-reported a 150,000 b/d gain to 910,000 b/d, its highest since August. Secondary sources had Venezuela's November output much lower at 700,000 b/d.

Supply/demand balance for 2020
Q1 2020 Q2 2020 Q3 2020 Q4 2020
World oil demand 99.78 99.79 101.78 102.12
Non-OPEC supply 65.82 66.09 66.46 67.49
OPEC NGLs and non-conventionals 4.83 4.83 4.83 4.83
Implied demand for OPEC crude 29.13 28.88 30.5 29.81
Source: OPEC
Units: milion b/d

-- Herman Wang, herman.wang@spglobal.com

-- Edited by James Leech, newsdesk@spglobal.com