BAKU, Azerbaijan, April 30. Although OPEC is not likely to manage to fully unwind its pandemic-related production cuts by the end of this year, its production increase should still account for much of the growth in global supply this year, Trend reports with reference to the UK-based Capital Economics research and consulting company.
The company analysts suspect that Angola and Nigeria will continue to produce well below quota given the long-standing underinvestment in their oil sectors. And output in Libya, which is not subject to quotas, will probably fall if the latest militant disruption continues.
“We forecast that Russian crude oil production will gradually decline over the course of the year given the difficulty finding buyers for it, with the biggest decreases in the second half of the year as storage space becomes scarcer. Of course, a ratcheting up of Western sanctions could both hasten and deepen that decline. On the demand side, the slowdown in economic growth that we expect in most advanced economies and in China will act as a drag on oil demand growth,” reads the latest report released by Capital Economics.
This will be exacerbated by not just high crude oil prices, but even higher prices for refined products, like gasoline, according to the company.
“Overall, we forecast that the global oil market balance will shift to a small surplus this year, with supply rising to 100.1m bpd from 95.9m bpd in 2021, and demand rising to 99.7m bpd from 96.2m bpd. Therefore, crude oil prices should ease back, although we admit there is a great deal of uncertainty surrounding the fundamentals this year,” the report says.