Saudi Arabia has overtaken the U.S. as the world’s biggest oil producer for the first time since 2014, according to the Oil Market Report by the International Energy Agency (IEA).
Saudi Arabia has added around 400,000 barrels per day of low-cost production since May of this year. At the same time the U.S. – which had been the world’s top producer of crude and other liquid hydrocarbons since April 2014 – has shut down some 460,000 bpd of high-cost output since May 2016, Bloomberg quoted the report as saying.
According to the IEA, global growth in crude oil demand will slow down faster than previously expected. The agency now sees growth at 1.3 million bpd for 2016, which represents a downward revision by 100,000 bpd from its previous estimate. The revision was prompted by a faster-than-expected waning in demand growth over the third quarter of the year.
Last month, OPEC crude production reached record levels of 33.47 million bpd, thanks to Middle Eastern producers, the IEA said. Kuwait and the UAE both reached the highest output levels on record, Saudi Arabia was close to record-highs, and Iran continued to increase production, reaching the highest level since the sanctions were imposed. Related: Record Year For Solar Expected As Installations Surge 43%
At the same time, however, the IEA noted that global production growth is slowing down, with the U.S. alone accounting for half of this slowdown as independent E&Ps have cut investments in new output in an immediately palpable way. The agency said non-OPEC supply is expected to return to growth in 2017.
OPEC itself also expects non-OPEC supply to increase next year and on Monday it revised up its forecast for non-OPEC oil supply by 350,000 bpd and now expects producers outside the cartel to supply 56.52 million bpd to the market in 2017, in a signal that the global glut will persist.
The projected non-OPEC supply next year would be an increase by 200,000 bpd over this year, OPEC said in its Monthly Oil Market Report, the last one before its members and non-cartel partners meet to discuss a potential output freeze in Algiers later this month.
By Tsvetana Paraskova for Oilprice.com
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