In the latest Oil Market Report update issued by the International Energy Agency on June 14, global oil prices are “unlikely to increase as sharply as they did” from mid-2017 onwards due to growth in oil supplies from nations that are not members of the Organization for Petroleum Exporting Countries or “OPEC.”
“As far as supply is concerned, we have revised upwards our estimate for 2018 non-OPEC production growth to 2 million barrels per day (b/d) and in 2019 we will also see bumper growth, albeit slightly reduced, of 1.7 million b/d,” the IEA said in a statement.
The U.S, shows by far the biggest gain in oil production, the group said; about 75 percent of the total across 2018 and 2019.
For example, in Texas by the end of 2019 the IEA expects a net 575,000 b/d of additional pipeline capacity will be added beyond its earlier predictions, albeit with most of it coming on line in the second half of the year. In the meantime, capacity will likely remain tight but production will still be able to grow strongly, by 1.3 million b/d this year and 900,000 b/d in 2019, it said.
“Our non-OPEC growth for 2019 includes a modest increase from Russia reflecting a possible contribution to compensating for lost production from Iran and Venezuela,” IEA added.