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6 Pages

Short-term oil supply remains flat as low oil prices persist


Short-term oil supply remains flat as low oil prices persist

Report summary

Global liquids production is expected to remain flat in 2016, at 96.1 million b/d. Underlying this, we forecast a decline in non-OPEC supply (including unconventionals and processing gains) of 0.6 million b/d in 2016, driven by declines in US tight oil, Asia and the North Sea. This substantial slowdown is key to rebalancing the oil market in 2016 as OPEC shows no real sign of cutting back its production; although the rate of OPEC growth this year is far slower than in 2015. OPEC crude production is forecast to grow in 2016 by 0.4 million b/d, including Indonesia, which re-joined OPEC effective 1 January 2016. This moderate gain is driven by the lifting of Iran sanctions and subsequent production returning to the market, alongside Saudi Arabia maintaining output above 10 million b/d.

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Description

This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

This report helps participants, suppliers and advisors understand trends, risks and issues within the upstream oil and gas industry. It gives you an expert point of view to support informed decision making.

Wood Mackenzie's 500 dedicated analysts are located in the markets they cover. They produce forward-looking analysis at both country and asset level across the globe, backed by our robust proprietary database of trusted research.

Proprietary data means a superior level of analysis that is simply not available anywhere else. Wood Mackenzie is the recognised gold standard in upstream commercial data and analysis.

  • Sanctions are lifted on Iran
  • US tight oil production has shown resilience but is vulnerable to renewed budget cuts
  • Upstream investment will fall again in 2016; cost cutting will intensify
  • OPEC will continue to maintain production
  • Pre-FID Deferrals
  • Other signposts for short-term supply
    • Maintenance on the back burner
    • Russia liquids production to remain stable in 2016
    • Major conflicts continue to affect production
    • Libya peace talks make progress but no near-term recovery
    • Clamp down on theft but production stagnates in Nigeria
    • Petrobras makes downward revision to 2016 Brazil outlook
    • Argentina advances in tight oil
    • Exploration budgets cut further; liquids volumes discovered in decline

In this report there are 3 tables or charts, including:

  • Sanctions are lifted on Iran
  • US tight oil production has shown resilience but is vulnerable to renewed budget cuts
  • Upstream investment will fall again in 2016; cost cutting will intensify
  • OPEC will continue to maintain production
  • Pre-FID Deferrals
    • Key country supply risks in 2016
  • Other signposts for short-term supply
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