International Energy Association (IEA) reported booming U.S. output will offset falling exports from Iran and Venezuela.The report added that the world will even require very little extra oil from OPEC to fill the gap as higher output from producers outside OPEC, especially from the United States in the second quarter, would keep the market well supplied.
“There is scope for other producers to raise supply,” said the IEA. This will fill any gap left by lower production from Iran due to the U.S. sanctions.
In April global oil supply fell by 300,000 bpd, the IEA said with losses in Canada, Kazakhstan, Azerbaijan, and Iran leading these. However, OPEC crude output rose by 60,000 bpd to 30.21 million bpd, majority from Libya, Nigeria and Iraq to offset Iranian losses.
“There is certainly scope for other producers to step up production,” adding that it estimated OPEC in April had produced about 440,000 barrels per day (bpd) less than the amount agreed in a production pact, with Saudi Arabia producing 500,000 bpd below its allocation.
The IEA said there was a “modest offset to supply worries from the demand side,” as expected growth in global oil demand to be 1.3 million bpd in 2019 or 90,000 bpd less than previously forecasted. The demand in 2018 was estimated to be 1.2 million bpd. Global oil demand would actually average 100.4 million bpd in 2019 which would exceed 100 million bpd for the first time.
In 2019 U.S. oil production was forecast to rise by 1.7 million bpd. This would account for about 1.2 million bpd of that rise, the IEA said. Even though it would be lower than U.S. crude oil output growth of 1.6 million bpd in 2018.