OPEC raised its oil supply forecast from non-OPEC members in 2018 as rising prices encourage US shale oil companies to pump more crude, weakening the impact of an OPEC-led deal to get rid of the oversupply and a major collapse in Venezuela’s output.
OPEC said in its monthly report that non-OPEC producers will boost production from 990,000 bpd to about 1.15 million bpd this year, higher than previously expected.
It explained “Rising oil prices bring more supply to the market, especially in North America, especially shale oil.
“The overall perception is that the market is clearly improving, and in the overall picture,” the IEA, which coordinates energy policies in industrialized countries, said in its monthly report.
It added that there was growing concern about the decline in Venezuela’s output due to its economic crisis, debts, infrastructure problems, the deterioration of the oil network and US financial sanctions, which fell to 1.61 million barrels per day in December, a level close to the lowest in the last 30 years. , which helped oil prices jump above $ 70 a barrel in early January, the highest level in three years.
According to the International Energy Agency (IEA), as a result of the decline in Venezuela’s supply, the Organization of the Petroleum Exporting Countries (OPEC) cut its crude output during December to 32.23 million barrels per day, boosting the Organization’s compliance with the supply reduction agreement to 129 percent.
OPEC, Russia and a number of outside producers have been trying to cut supplies since last year and extend the deal until the end of 2018 to get rid of the oversupply of crude accumulated since 2014.
Opec’s commitment to production cuts remained high in December and Venezuela’s oil production fell sharply this month, the report showed.
Oil prices rose after the report was released to trade above $ 69 a barrel near its highest level since December 2014.
The calculations, based on OPEC data, showed that OPEC’s 11 commitments to production targets rose to 129 percent from 121 percent in November.
OPEC said the agreement to extend production cuts and disruptions in North Sea supplies boosted gains after damage to the pipeline network, which supplies 40 percent of the UK’s oil and gas in the North Sea, as a result of damage to a pipe. OPEC raised its forecast for world oil demand last year to 96.99 million barrels per day and attributed it to better data expected for Europe and China.
As for the current year, it expected global consumption to reach 98.51 million barrels per barrel, and that the oil price achieved the largest increase in four years to reach $ 70 per barrel was due to the decision taken by the members of the Organization of Petroleum Exporting Countries (OPEC), which includes 14 countries, the world’s largest oil exporter controls 40% of world output by cutting production. Since December 2014, oil prices have not reached that level, and members have assured that they will continue this cut.
As for the situation of Iraq’s oil, and within the direction of Prime Minister Haider Abadi to the Iraqi state ministries of reform and development and the fight against corruption in all its forms, the Iraqi Ministry of Oil pursues a wise policy in the development of plans for reform and development. In light of the ongoing successes of the ministry, Iraqi Oil Minister Jabbar al- Luaibi announced that the Iraq’s oil production is close to 5 million barrels a day, with Iraq’s commitment to the target production rate under a global agreement to cut supplies.
Al-Luaibi confirmed that the current production reached 4.3 million barrels per day and stressed the continuation of the agreement to reduce the production of oil in the OPEC countries and beyond, despite the strong rise in oil prices, noting that oil markets still need more time before settling.
Al-Luaibi said that the ministry is working on the conclusion of three contracts with international gas companies by the middle of this year for the use of gas in the south of the country, adding that Iraq does not have suitable facilities allow the exploitation of some gas during the extraction of crude oil, which is forced to burn, Iraq plans to eliminate the burning of gas associated with the extraction of oil by 2021.
To develop the Kirkuk oil fields, the Iraqi Ministry of Oil signed a memorandum of understanding between the Ministry of Oil and global BP company to boost production capacity “in the oil field of Kirkuk” after the control of Iraqi forces in October, belonging to the company ” Iraqi North Oil company ” owned by the government, which manages the fields.
Oil Minister Jabbar Ali al-Aluaibi stressed the ministry’s keenness to develop the oil fields in Kirkuk in order to open a new page for the work of the North Oil Company and improve its role in supplying the national oil production and rehabilitating the company on solid foundations.
More than twice the current production capacity of 420 thousand barrels per day, however, the production of oil from those fields, except the fields of Havana and Bay Hassan which are stopped, does not exceed 120 thousand barrels per day, to meet local needs.
Al-Luaibi inspected the oil fields in Kirkuk province and hastened the rehabilitation process. Al-Luaibi met Kirkuk Governor Rakan al-Jubouri and discussed issues related to oil and oil derivatives.
Al-Allaibi was accompanied by a visit to the oil fields in Kirkuk, the director of BP in the Middle East Michael Townsend, who said earlier that the company will conduct surveys and prepare the studies required to work on developing oil fields in Kirkuk and increase production to rates up to (750) Per day
In 2013, the Iraqi Ministry of Oil signed an advisory contract with the British company to assist the North Oil Company to develop the fields of Havana and Baba Karkar.
The capacity of the field Baba Karkar productivity 50 thousand barrels, and the field of Havana 50 to 60 thousand barrels, according to an official in the «North Oil Company». But the work to develop the two fields was not implemented because the Baghdad government lost control of the fields in favor of Kurdish forces in 2014 in the wake of the surprise attack of the terrorist organization of the ISIS and control of large areas in the north and west of the country.
Luaibi began talks with the British company in October, days after the arrival of Iraqi forces in the region. As oil exports from the fields, which were transported in a pipeline through Turkey, stopped after the operation of the Iraqi army, he said he would hold talks with Turkey to reach agreement on the oil pipeline to the Turkish port of Ceyhan from the Kirkuk fields.
Kirkuk is one of the oldest and largest oil fields in the Middle East, containing an estimated 9 billion barrels of recoverable oil; Iraq is the second largest producer of the Organization of the Petroleum Exporting Countries (OPEC) after Saudi Arabia.
Iraq currently produces 4.4 million barrels a day, as a commitment to an agreement between oil exporters to support crude prices, but under the supervision and follow-up of the Minister of Oil Aluaibi, the production capacity of Iraqi oil close to five million barrels per day.
Rawabet Center for Research and Strategic Studies