The oil market will return to surplus in 2011
December 14th 2011
Global crude oil production growth is estimated to slow to 1.7% in 2011, largely reflecting the loss of Libyan supply, but also production problems in the North Sea, Angola, Yemen and Azerbaijan. (Global output rose by 2.1%, or 1.8m barrels/day, in 2010.) These losses were offset by increased OPEC production, particularly from Saudi Arabia, where output reached a 30-year high in August of 9.8m b/d. Production from Iraq is also growing strongly and this will continue in 2012, as will the gradual return of Libyan output. Reflecting these trends, we expect OPEC output to grow by a brisk 6.8% in 2012, before slowing to a still-healthy 4.1% growth rate in 2013. Non-OPEC production growth will be sluggish, at around 1% a year in 2012-13, with falling production from the North Sea and Mexico partly offsetting gains elsewhere. One area of non-OPEC strength will be the production of unconventional oil in North America—the tar sands in Canada and shale oil in the US. Further out, OPEC's capacity will be boosted by the coming on stream of the massive—900,000 b/d—Manifa field in Saudi Arabia, and by rising production in Nigeria, Angola, Algeria and Qatar. However, towards the end of the forecast period, we expect a greater contribution from non-OPEC output, particularly from Brazil and some Caspian producers.