OPEC Says Weak Oil Prices to Curb Output
January 18 2016 - 10:10AM
Dow Jones News
LONDON—Oil prices remained below $30 a barrel Monday but the
Organization of the Petroleum Exporting Countries flagged the
potential for a recovery, saying the market would start to
rebalance this year as weak prices take their toll on production
outside the cartel.
"After seven straight years of phenomenal non-OPEC supply
growth, often greater than 2 million barrels a day, 2016 is set to
see output decline as the effects of deep capex cuts start to feed
through," the producer group said in its closely watched monthly
report.
Though OPEC acknowledges more than 2 million barrels a day of
new projects are still planned to go ahead this year, the
organization still expects non-OPEC output to fall by almost
700,000 barrels a day in 2016 as the effects of lower capital
spending are felt.
The U.S. is expected to see the biggest decline in production,
with output forecast to fall by nearly 400,000 barrels a day, but
OPEC said places such as Canada, the North Sea, Latin America and
parts of Asia are also particularly vulnerable.
OPEC's oil production, on the other hand, remains elevated,
despite declining by 200,000 barrels a day last month, according to
secondary sources. The group's output—including newly reinstated
member Indonesia—fell to 32.2 million barrels a day in December led
by lower production in Nigeria, Saudi Arabia and Iraq. The group's
output still remains above the anticipated demand for its oil
though, which OPEC sees rising by 1.7 million barrels a day to 31.6
million barrels a day this year.
Meanwhile, the lifting of sanctions against Iran this weekend is
expected to add still more oil to the mix in the coming months.
Write to Sarah Kent at sarah.kent@wsj.com
(END) Dow Jones Newswires
January 18, 2016 09:55 ET (14:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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