In the recent Organization of the Petroleum Exporting Countries report the OPEC oil production slightly declined during September compared to August 2011.
OPEC’s crude oil production slightly slipped by 77 thousand bbl/d during September as it reached 29,896 thousand bbl/d compared with 29,973 thousand bbl/d in August. Libya’s oil production was still very low at 96 thousand bbl/d compared with an average of nearly 1.6 million bbl/d back in 2010, but it’s a sharp increase compared to a 7 thousand bbl/d in August.
The main reason for the decrease in production was due to the slight drop in Saudi Arabia and Nigeria’s oil production as it fell by 122 thousand bbl/d and 162 thousand bbl/d, respectively. The rest of OPEC countries nearly didn’t change their oil quotas during September.
The global oil supply averaged in September at 88.50 million bbl/d, which is roughly 0.76 million bbl/d gain compared with August’s average oil supply.
The oil supply of non-OPEC countries is estimated to reach 52.63 million bbl/d in 2011, an increase of 0.31 million bbl/d compared with 2010. This revised estimate is slightly lower than last month’s report. The countries with downward adjustment were UK, Brazil, Canada and Argentina.
The expected worldwide crude oil demand growth has been revised down in the recent report by 0.18 million bbl/d. This revision is due to the uncertainty in the financial markets. The global oil demand is estimated to grow in 2011 by 0.88 mbbl/d to an average of 87.81 million bbl/d.
OECD countries’ total oil demand is estimated to decline by 0.66% or 0.30 mbbl/d in 2011 to 45.85 mbbl/d, compared with 46.52 mbbl/d in 2010. This revised projection is lower than last month’s report.
These findings suggest that the global oil market seems to further loosen up with expected decrease in crude oil demand. If these findings represent the oil market well, this could mean that fundamentally, crude oil prices should decline in the months to come.
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