Select your city:

VTB Bank call center

+7 (800) 200-77-99
+7 (495) 739-77-99
For general information and enquiries

OPEC numbers confirm Saudi ramp up; EIA now sees markets balanced


OPEC published its Monthly Oil Market Report (MOMR) yesterday, with few changes to the forecast figures. Based on the MOMR supply/demand data, we estimate a net supply surplus of 0.4mmb/d in 2013 and 0.6mmb/d in 2014 (both unchanged from last month’s forecast), after assuming prospective OPEC crude production remains at the August production level.

Oil demand was raised 25kb/d MoM for 2013 and 2014 as a result of higher than expected actual results in 1H13 and positive signs of improvement in some major OECD economies. Non-OPEC oil supply in 2013 was raised 70kb/d MoM on account of upwardly revised expectations for North American production and the Sudans. A 135kb/d uptick in non-OPEC supply in 2014 mainly reflects the previous year’s revisions carried forward.

The MOMR has OPEC production in August, based on secondary sources, dropping 0.1mmb/d MoM to 30.2mmb/d as a 0.5mmb/d drop in Libyan production was mostly offset by increased Saudi (+0.2mmb/d) and Iraqi (+0.1mmb/d) volumes. Saudi production is a fraction below 10.0mmb/d, according to the MOMR.

The EIA also released its Short-Term Energy Outlook yesterday. It observed that the global oil market tightened in August as a result of increased unplanned production disruptions coinciding with peak summer demand, while that was exacerbated by increased geopolitical concerns over Syria.

The EIA has put through a number of revisions to its September STEO, resulting in a net supply surplus of 0.1mmb/d in 2013 and 2014 based on its own forecasts for OPEC crude production. Previously, the EIA had global oil markets in a 0.2mmb/d deficit for 2013 and a 0.3mmb/d surplus for 2014.

Non-OPEC supply has been adjusted up 0.3mmb/d in 2013 without clarifying where the production increase originates. However, the EIA estimates US production in August to have averaged 7.6mmb/d, the highest monthly rate since 1989. The agency has also increased its full year 2013 average production estimate for the US 0.1mmb/d to 7.5mmb/d and for 2014 by 0.2mmb/d to 8.4mmb/d, as compared with last month’s STEO.

The Syrian crisis has been seen by many commentators as a significant contributor to the rise in the Brent price since late August. The likelihood of a US-led attack has diminished somewhat with the Russian proposal that Syria place its chemical weapons stocks under international control and Syria’s reported acceptance of such a plan. However, we see the ongoing collapse in Libyan production as the main factor supporting the oil price. 

Colin Smith, Marc Jacouris
VTB Capital analysts

OPEC, oil

Back to the list

VTB group news subscribe
  • E-mail subscribe
  • RSS lent
Download the list of cities.....