OPEC have moved to take supply out of the market by announcing a 1.2 mmbbl/d production cut from October 2018 reference levels, but the key question at the start of 2019 is – have they done enough?
Westwood estimates they will fall short of this total by over 200 kbbl/d, as the Middle East and North America will continue to produce liquids at record levels leading to 99.4 mmbbl/d of supply in 2025, 8% higher than 2018.
The dynamics on the supply and demand side point to some uncertainty for 2019, and potentially downside risk to oil price in the near-term. In the longer term, however, the issues of low project sanctioning and reserve-replacement will have to be addressed at some point to avoid a supply crunch.
The World Drilling and Production Market Forecast includes data and analysis for more than 70 of the most important energy producing countries (covering >99% of global hydrocarbon supply), including detailed drilling and production forecasts for each country covering the period 2019-2025.