OPEC Cuts Forecast for Oil-Supply Growth

OPEC Cuts Forecast for Oil-Supply GrowthOPEC Cuts Forecast for Oil-Supply Growth

OPEC cut forecasts for global oil-supply growth in 2015 as US producers lead a slowdown in drilling after last year’s price collapse, TASS reported.

The Organization of Petroleum Exporting Countries lowered its estimate for non-OPEC supply growth by about 400,000 barrels a day, led by a reduction of 130,000 a day in the US Estimates for Colombia, Canada and Yemen were also trimmed.

Oil has rebounded more than 20 percent in the past two weeks in London as a seven-month price slump pressured US drillers to idle rigs and companies from Royal Dutch Shell Plc to Chevron Corp. to curb spending plans. US oil explorers have cut the number of rigs in operation to the lowest in three years, data from Baker Hughes Inc. showed on Feb. 6.

“The main factors for the lower growth prediction in 2015 are price expectations, a declining number of active rigs in North America, a decrease in drilling permits in the US and a reduction in the 2015 spending plans of international oil companies,” OPEC’s Vienna-based research department said in its monthly market report.

  US Estimates

US oil supply will increase 820,000 barrels a day in 2015 to 13.64 million a day, about half the gain recorded in 2014, according to the report. The estimate for total non-OPEC supply growth in 2015 was cut by 420,000 to 850,000 a day, with Colombia accounting for the second-biggest reduction after the US Non-OPEC supply will still expand to 57.09 million barrels a day in 2015.

While the organization increased estimates for the amount of crude it will need to provide this year, as a result of weaker non-OPEC growth, the 29.2 million barrels a day required remains about 1 million a day below its current output.

Production from OPEC’s 12 members slipped by 53,000 barrels a day in January to 30.15 million a day because of losses in Iraq, according to external sources cited by the report. Iraq’s production dropped by 279,100 barrels a day in January to 3.35 million a day, according to the report.

Global oil demand will increase by 1.17 million barrels a day, or 1.3 percent, in 2015 to 92.32 million barrels a day, according to the report. Brent crude prices steadied near $58 a barrel on Monday as falling US oil rig counts and signs of healthy US growth offset concerns over the strength of the Chinese economy.

China's trade performance slumped in January, pointing to lower fuel demand in the world's biggest energy consumer. But the falling number of US oil rigs, at its lowest since December 2011, reduced the impact of the Chinese data on oil prices, which have dropped more than 50 percent since June.