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Country Report 14 December 2017

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Report summary

The near-term outlook for global supply remains one of strong growth despite the outcome of the OPEC meeting on 30 November that confirmed strong commitment to continue managing the market through 2018. Global supply is forecast to surpass 100 million b/d in Q4 2018, a year-on-year increase of 1.7 million b/d from Q4 2017. Downward revisions in 2017 are dominated by the impact of the North Sea Forties pipeline system (FPS) shut-in in December, to repair a crack discovered during a routine inspection. But we have made upward revisions through 2018 and 2019, driven primarily by the US. US NGLs are revised up around 150-170,000 b/d in 2018 and 2019; we now expect higher volumes of associated gas production from the Permian Basin. Crude oil has also been revised up – production data for September showed month-on-month growth of 275,000 b/d, lifting baseline supply.

Executive summary
- Global supply: OPEC extends production cuts through 2018 as US supply shows momentum shift
- 30 November 2017 OPEC meeting: rollover through 2018 in line with Wood Mackenzie base case
- Non-OPEC supply growth revised up to 1.6 million b/d in 2018 and 1.1 million b/d in 2019
- Momentum shift in onshore US supply supports strong growth outlook in 2018
- Forties pipeline outage hits UK production hard in December; otherwise minimal revisions to non-OPEC supply outside US
  - Liquids changes (million b/d)