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North American oil production to reduce OPEC 2014 production

By Bob Downing Published: July 31, 2014

From GlobalData on Wednesday:

  • Global oil demand in 2014 will increase by around 1.2 million barrels per day (mmbd) compared to 2013 levels
  • ‘The growth in US oil production of just over 1 mmbd, combined with the expansion of Canadian production, will continue to reduce imports into North America,’ says analyst

 

LONDON, UK (GlobalData), 30 July 2014 - Global oil demand in 2014 is forecast to increase by about 1.2 million barrels per day (mmbd) compared to 2013 levels, while non-Organization of the Petroleum Exporting Countries (OPEC) members’ production will grow by approximately 1.6 mmbd, reducing the call for OPEC production, according to research and consulting firm GlobalData.

The company’s report* states that a significant increase in non-OPEC production is forecast to occur, particularly in North America, where crude oil and condensate production will increase by about 1.3 mmbd.

Carmine Rositano, GlobalData’s Managing Analyst covering Downstream Oil & Gas, says: “Crude oil production increases are also expected in South America, the Former Soviet Union and from the greater use of biofuels. This will more than offset slightly lower production anticipated in the North Sea and Mexico.

“The growth in US oil production of just over 1 mmbd, combined with the expansion of Canadian production, will continue to reduce imports into North America. These could then flow into Asia, where the rise in oil demand will greatly exceed the slight increase forecast in local production.”

Venezuelan crudes are now more likely to end up in Asia than North America, as Asia imported just under 1 mmbd of Venezuelan crudes in 2013. This has increased tonne-mile demand in the tanker industry for Very Large Crude Carriers, while decreasing the need for shorter-haul tanker movements into North America, according to the analyst.

Rositano continues: “Crude oil supply patterns and pricing differentials, along with marine freight rates and refining margins, will continue to be impacted by North America’s higher forecast production levels, especially if the current ban on exporting US crude oil remains in place.

“It will be interesting to see which OPEC member will reduce its production should Iraq’s output continue to increase and when Libyan production comes back online. It also remains to be seen whether Iran’s export level will increase, should it reach an agreement over the nuclear issue with the West.”

*Increase in Non-OPEC production to exceed growth in Global Oil Demand in 2014, reducing call on OPEC production

-ENDS-

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