Friday December 16, 2016
In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.
Let’s take a look.
1. Non-OPEC deal sealed, but cuts happening anyway
(Click to enlarge)
- On December 10, OPEC convinced a group of non-OPEC producers to join them in cutting output, a deal that added fuel to the fire for oil prices.
- But the 558,000 bpd reduction promised by non-OPEC producers is much less impressive than it seems. Mexico, for example, said it would chip in 100,000 barrels per day in reductions. But its aging oilfields are declining anyway, with natural depletion expected to take cut into output by 180,000 bpd in 2017.
- Other cuts come from Azerbaijan (-35,000 bpd), Oman (-40,000 bpd) and Kazakhstan (-20,000 bpd). Azerbaijan and Oman also won’t have to do much to adhere to those commitments, as natural decline is taking hold.
- Kazakhstan is an uncertainty. The massive Kashagan oil field came online this year, and is ramping up production. The gargantuan project will add several hundred thousand barrels per day in output next year, raising questions about how exactly the country will meet its promised reduction.
- It’s a clever move by the countries involved, packaging expected reductions as a “production…