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OPEC’s crude oil production is expected to grow to 32.41 million bpd this year from 31.76 million bpd in 2015, with higher Iranian output accounting for most of the increase, the U.S. Energy Information Administration (EIA) said in its monthly Short-Term Energy Outlook on Wednesday.
In 2017, OPEC’s crude production is forecast to further increase, to 32.95 million bpd. Oil supply outages averaged 2.4 million bpd across OPEC members in August, up by 100,000 bpd from July, with Nigeria and Libya accounting for most of the crude supply disruptions.
OPEC’s surplus crude production capacity is projected to fall to 1.49 million bpd this year and to 1.35 million bpd next year, from 1.59 million bpd in 2015. Although surplus capacity below 2.5 million bpd points to a relatively tight oil market, the high global oil inventories make the lower surplus capacity forecast less significant, the EIA noted.
Non-OPEC petroleum and other liquids output is expected to drop to 56.98 million bpd in 2016 and to 56.76 million bpd in 2017, from 57.40 million bpd last year, with the U.S. tight oil production changes significantly affecting total non-OPEC output.
The U.S. total production of liquid fuels is projected to drop by 290,000 bpd this year and remain flat next year, and lower onshore crude production will be partially offset by expected increase in HGL production, Gulf of Mexico crude output, and liquid biofuels output, the EIA said.
The Administration expects Brent prices to average US$45 per barrel in the fourth quarter this year and the first quarter next year. Global political and geopolitical events may push the prices close to either sides of the US$40-US$50 range, the EIA said.
One such event is the upcoming informal OPEC meeting in Algeria later this month, and chances for a potential output freeze may now be a bit higher than they were in early August. The market has been seesawing on every hint or remark by influential officials and ministers and will continue to do so at least until the September 26-28 meeting in Algiers.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.