OPEC trimmed estimates for supplies from outside the group in 2016 as the U.S. shale-oil industry suffers.
On Monday the Organization of Petroleum Exporting Countries said it cut 2016 estimates for
non-OPEC output by 110,000 barrels a day.
However, the cartel sees non-OPEC
supply expanding slightly next year, while the International Energy
Agency on Friday forecast a contraction of 500,000 barrels a day, the
biggest since 1992.
Saudi Arabia told OPEC it trimmed output in August to a six-month low, Bloomberg reports.
The main focus is now on how fast U.S. production falls, OPEC told in a report.
“There are signs that U.S. production has started to respond to reduced investment and activity,” the cartel said.
Last year, West
Texas Intermediate crude futures have dropped more than 50 percent driving an unprecedented cutback in drilling that
threatens to end the nation’s shale-oil boom. Prices have tumbled as
OPEC repeats Saudi Arabia’s strategy of defending its share of the global market against shale and other rivals.
The report also noted that supplies from non-OPEC nations such as the U.S., Canada, Russia and Brazil will rise by 160,000 barrels a day to 57.6 million in 2016. Last month, the cartel had projected that non-OPEC supplies would rise by 270,000 next year.
2016 estimates for U.S. supply were reduced by 103,000 barrels a day, with the country’s total oil output predicted to stay at 13.97 million.
Shrinking U.S. output growth, combined with signs of strengthening demand, “could contribute to a reduction in the imbalance of oil-market fundamentals,” OPEC said.
The organization also increased projections for the quantity of crude it will need to produce next year by about 200,000 barrels a day to 30.3 million. It is still about 1.2 million lower than the 31.54 million daily barrels its members produced in August.
In August, output from OPEC’s 12 members increased by
13,200 barrels a day, according to data the group compiles
from media and other institutions.
Separate data submitted directly by member nations, indicated that Saudi Arabia, the group’s biggest and most influential member, reported that it slashed production by 96,500 barrels a day to 10.265 million, the lowest level since February.
