Forecast for 2008
Non-OPEC supply is estimated to increase by 110 tb/d to average 49.6 mb/d over 2007, following a downward revision of around 110 tb/d compared with last monthís assessment. Downward revisions were made in the US, UK, Mexico, Australia, Brazil, Russia and Azerbaijan. The fourth quarter witnessed a significant downward revision of around 500 tb/d toreach 49.9 mb/d, an increase of 1.1mb/d over the previous quarter, with production estimated at 48.8 mb/d. Upward revisions in the past three quarters of this year were taking into account therecent updates to actual data. On a quarterly basis, new OPEC supply is estimated at 49.7 mb/d,49.9 mb/d, 48.8 mb/d and 49.9 mb/d, respectively.
Total OECD oil supply in 2008 is expected to reach 19.8 mb/d, a decline of almost 0.4 mb/d compared to the previous year and downward revision of 70,000 b/d from the previous report. The second quarter was revised slightly upwards, while the third and fourth quarters were revised lower by 77 tb/d and 216 tb/d, respectively. North America is estimated to fall around 190 tb/d over the previous year to average 14.12 mb/d. The OECD Pacific is also revised down by 18 tb/d to a total of 0.64 mb/d, an increase of 40 tb/d. No revision occurred in Western Europe oil supply, which remains almost unchanged at 5.0 mb/d for a drop of 0.2 mb/d from 2007.
Oil supply in the USA is expected to reach 7.5 mb/d, 20 tb/d higher than the 2007 figure, with a slight downward revision of 26 tb/d from the last assessment. The main revision came from the fourth Quarter 2008 indicating about 100 tb/d from the previous estimated figure in the last Monthly Oil Market Report. The recovery of oil supply production in the Gulf of Mexico from the effect of hurricanes Gustav and Ike appears to be slower than expected and this has been the reason behind downward revision in fourth quarter 2008. As of December, the Minerals Management Service reported that around 194 tb/d or 14.9% of oil production is still shut in. In December, additional growth is expected to come from recovery of the Gulf of Mexico, and the ramping up for production from new fields, in particular BPís Thunder Horse, as well as increased production from Alaska following maintenance. Preliminary figures for November indicate that US oil supply averaged 7.6 mb/d, or 0.34 mb/d higher than the October level.
Canada and Mexico
Canadian oil supply for 2008 is estimated at 3.4 mb/d, an increase of 90 tb/d over 2007, unchanged from the last Monthly Oil Market Report assessment. However, the downward revision in the fourth quarter of 2008 was offset by the upward revision in actual data of the third quarter 2008. On a quarterly basis, production stands at 3.33 mb/d, 3.45 mb/d, 3.40 mb/d and 3.44 mb/d, respectively. The production data available for November at 3.43 mb/d is slightly higher than the October level Ė this level is almost the same as our level estimate for the fourth quarter 2008.
In 2008, Mexican oil supply is expected to average at 3.2 mb/d, a decline of 0.3 mb/d over the 2007 level, this being a downward revision of 19 tb/d from the previous Monthly Oil Market Report. The fourth quarter was revised down by 75 b/d reflecting up to date information for October and preliminary data for November. These changes reflect a faster than expected decline in Cantarell production. The latest production data available from November indicates that Mexican oil supply averaged 3.1 mb/d, slightly increase from October level.
Total oil supply in Western Europe is expected to average 5.0 mb/d, a decline of 0.24 the previous year, unchanged from last monthís assessment. The actual reported data indicates a downward revision of 90 tb/d in the third Quarter from the UK and Denmark, however, the fourth quarter showed an upward revision, coming mainly from Norway.
In Norway, oil production is expected to decline by 0.1 mb/d averaging 2.45 mb/d with an approximate 23 tb/d upward revision in comparison to the previous assessment. The fourth Quarter 2008 saw a main upward revision by 80 tb/d to average 2.53 mb/d. These changes are due to actual field production being higher than expected. The preliminary data for November indicated an increase of 30 tb/d to a total of 2.56 mb/d. This supports the expected increase in the fourth quarter of 2008.
Oil supply from the UK is expected to decline by 150 tb/d from the previous year to average 1.54 mb/d, about a 17 tb/d downward revision from last monthís estimate. The downward revision came from the third Quarter 2008 as an adjustment taking into account the actual reported data, resulting from a heavier than expected impact from maintenance activities during the summer period.
Oil supply in this group is estimated to average 0.64 mb/d, which represents an increase of 40 tb/d over 2007, and a downward revision of 18 tb/d compared to last monthís assessment. On a quarterly basis, Asian Pacific oil supply is estimated at 0.58 mb/d, 0.63 mb/d, 0.64 mb/d and 0.71 mb/d, respectively.
Australiaís oil supply is estimated to average at 0.53 mb/d, representing a slight increase of 10 tb/d over last yearís figure and a downward revision of 18 tb/d, with the bulk of the revision coming from the fourth Quarter 2008. The downward revisions came on the back of the expectation of lower than previously expected ramp-ups. On a quarterly basis, Australiaís oil supply is estimated at 0.47 mb/d, 0.53 mb/d, 0.54 mb/d and 0.59 mb/d, respectively. The preliminary figure for November indicates a production of 0.58 mb/d, slightly above October.
New Zealandís oil supply is expected to add around 30 tb/d over the 2007 figure to reach0.11 mb/d, unchanged from the previous Monthly Oil Market Report estimate.
Oil supply in this group is expected to reach a production level of 11.26 mb/d, which represents a growth of 0.3 mb/d over last yearís figure and an upward revision of 45 tb/d compared with last monthís assessment. The first three quarters showed an upward revision, while the fourth quarter indicates a downward revision. On a quarterly basis, Developing Countriesí oil supply is expected to average 11.16 mb/d, 11.17 mb/d, 11.27 mb/d and 11.45 mb/d, respectively.
Other Asia oil production is expected to reach 2.74 mb/d, 20 tb/d more than the 2007 figures and a downward revision of around 11 mb/d from the last assessment. Malaysiaís third quarter production underwent an upward adjustment reflecting the actual data, while Vietnamís figure for the fourth quarter 2008 was revised downward by 68 tb/d. On a quarterly basis, other Asian supply is expected to average 2.76 mb/d, 2.67 mb/d, 2.70 mb/d and 2.84 mb/d, respectively.
Latin American oil supply is expected to average at 4.1 mb/d, an increase of 0.21 mb/d over 2007, unchanged from our last assessment. On a quarterly basis output averaged at 4.00 mb/d, 4.06 mb/d, 4.12 mb/d and 4.17 mb/d, respectively. Brazil and Columbia are the only growth contributors with around 0.15 mb/d and 0.05 mb/d, respectively. The preliminary figures for November indicates Brazil growing by 50 tb/d due to a monthly gain from Roncador field, which recovered from technical problems in October.
The Middle East oil supply is estimate to fall by 20 tb/d over the 2007 figure to average 1.64 mb/d, indicating a lower estimate by 33 tb/d. The downward revision came from Oman in the fourth quarter 2008, offsetting the slight upward revision from Syria. On a quarterly basis, Middle East supply stands at 1.64 mb/d, 1.65 mb/d, 1.64 mb/d and 1.63 mb/d, respectively.
Oil supply in Africa is expected to average at 2.79 mb/d having increased by 80 tb/d over the previous year and representing upward revisions reflecting the adjustment of historical data. The quarterly distribution indicates a production of 2.77 mb/d, 2.78 mb/d, 2.81 mb/d and 2.81 mb/d, respectively.
FSU, Other Region
Oil supply in FSU is expected to average 12.6 mb/d in 2008, representing a growth of around 80 tb/d over 2007 and a downward revision of 53 tb/d from the last assessment. On a quarterly basis, FSU supply is expected to average 12.62 mb/d, 12.68 mb/d, 12.42 mb/d and 12.70 mb/d, respectively. Other Europe is expected to stay flat from 2007 at 0.14 mb/d, while China is estimated to grow by 90 tb/d to reach a level of around 3.86 mb/d, unchanged from the previous Monthly Oil Market Reportís assessment.
Russia is expected to average 9.80 mb/d, which represents a drop of 60 tb/d and a downward revision of about 27 tb/d from the last Monthly Oil Market Report. The fourth quarter was revised downward by 100 tb/d, reflecting that actual production figures were lower than had been anticipated. Indeed, preliminary data from November showed that production fell by about 40 tb/d from the October level. Output from Gazprom Neft, Lukoil and TNK-BP saw a decline in production lagging behind the earlier expectations. Surgutneftegas was also reported falling by 0.3 %. Output has averaged at 9.79 mb/d for the first eleven months around 0.8% lower than for the same period in 2007.
Oil supply from Kazakhstan is estimated to average 1.42 mb/d, an increase of 70 tb/d, unchanged from the previous estimate of the last Monthly Oil Market Report. Preliminary data for November indicates a growth of 100 tb/d reaching 1.47 mb/d, almost in line with our forecast for the fourth quarter 2008. On a quarterly basis, Kazakh supply is expected to stand at 1.42 mb/d, 1.44 mb/d, 1.33 mb/d and 1.48 mb/d, respectively.
Azerbaijan oil supply is estimated to average at 0.87 mb/d, an increase of 60 tb/d, a downward revision from the previous Monthly Oil Market Report by around 30 tb/d. The bulk of this revision occurred in the fourth quarter of 2008 in light of the latest actual data from October and preliminary data for November. The increase of 40 tb/d in November was less than initially expected reflecting the long recovery in outage in offshore Azerbaijanís Central Azeri field.
Forecast for 2009
Non-OPEC supply in 2009 is expected to average 50.22 mb/d, an increase of 0.6 mb/d over 2008, following a downward revision of 100 tb/d. On a quarterly basis, non-OPEC supply is forecast at 50.65 mb/d, 50.18 mb/d, 49.82 mb/d and 50.24 mb/d respectively.
Revisions to the 2009 forecast
Total OECD oil supply is seen to average 19.76 mb/d, flat compared with the 2008 figure. North America, USA and Canada will contribute to the growth, while Mexico is expected to decline. The three countries indicated a downward revision of the previous month assessment, with the bulk of the revision came from US. US supply is expected to average 7.76 mb/d, an increase of 250 tb/d over the previous year. Canadaís oil supply is expected to average 3.49 mb/d, a rise of0.1 mb/d; however, this growth is likely to be revised down further as some projects in Alberta will not be economically beneficial in the face of lower crude oil prices. Mexicoís oil supply may average 3.03 mb/d, a drop of 160 b/d from the current year, due to the continued decline of the giant Cantarell field. OECD Western Europe is projected to average 4.74 mb/d, a decline of 0.26 mb/d from the previous year, an upward revision of 35 tb/d from the last assessment. Norwegian oil supply is forecast to average 2.34 mb/d, a loss of 0.12 mb/d due to the decline of mature fields and expectation of heavy maintenance as well as extended shutdowns planned for the Statfjord North field in Norway. UK oil supply is expected to average 1.38 mb/d, a decline of 0.16 mb/d from the current year as a result of heavy seasonal maintenance shutdowns. Oil supply in OECD Pacific is expected to average 0.75 mb/d for growth of 0.1 mb/d over the current year. Oil production in Australia is seen edging higher by 70 tb/d to average 0.61 mb/d. This represents a downward revision of 48 tb/d from the previous assessment, reflecting the expected delays in some projects due to financial limitations.
Oil supply in Developing Countries is forecast to average 11.60 mb/d, representing a gain of 0.34 mb/d. The main contributors to this growth are Latin America and other Asia which are expected to increase by 0.19 mb/d and 0.11 mb/d respectively, while Africa and the Middle East are forecast to increase slightly by around 20 tb/d. Brazilís oil supply is seen averaging 2.53 mb/d, a gain of 0.24 mb/d over the current year. The forecast for Developing Countries was broadly unchanged compare to the previous assessment as an upward revision to Africa offset a downward revision in other Asia and Latin America. FSU is expected to average 12.83 mb/d, an increase of 0.23 mb/d. The bulk of this increase should come from Azerbaijan with 0.21 mb/d followed by Kazakhstan with 0.09 mb/d, while Russia is expected to continue to fall by 0.08 mb/d. This is despite the implementation of production facilities at Sakhalin-2 which should increase output in 2009. The main downward revision came from Russian production, which was lowered by 0.1 mb/d.
OPEC natural gas liquids and non-conventional oils
OPEC NGLs and non-conventional oils are estimated to average 4.63 mb/d in 2008, representing a Gain of 0.42 mb/d over the previous year. In 2009, OPEC NGLs and non-conventional oils are Projected to increase a further 0.62 mb/d over the current year to average 5.24 mb/d
OPEC crude oil production
Total OPEC crude oil production in November averaged 31.10 mb/d, representing a decline of around 740 tb/d over the previous month. This is in line with the decision taken to reduce production as of November. OPEC production excluding Iraq averaged 28.78 mb/d in November, a drop of 785 tb/d from the previous month.
World Oil Supply
Preliminary figures indicate that world oil supply averaged 85.79 mb/d in November, a decline of 0.19 mb/d from the previous month after a significant increase in October. The decline was mainly due to drop in OPEC production, which outpaced the growth in non-OPEC supply. This implies a drop in the OPECís share from 37.0% in October to around 36.2% in November. The estimate is based on preliminary data for non-OPEC supply, estimates for OPEC NGLs and OPEC crude production from secondary sources.
FSU net exports of crude and products
FSU net oil exports in 2008 are estimated to average 8.47 mb/d, a decline of 70tb/d from this year. On a quarterly basis, the actual data indicate net oil exports at 8.19 mb/d in the third quarter and averaging 8.26 mb/d in the fourth quarter. The forecast for 2009 shows FSU net oil exports averaging 8.66 mb/d, which represents an increase of 190,000 b/d over estimated figure of 2008.
Actual figures for the month of September indicate that crude exports from the FSU averaged 6.02 mb/d, around 530 tb/d more than in August. Preliminary October data shows an average of 5.95 mb/d, representing a decline of 65 tb/d from the previous month. Russian pipeline exports were up 92 tb/d, driven mainly by the exports from the Black Sea, which increased by 277 tb/d, while Baltic exports witnessed a decline of 157 tb/d. The CPC pipeline transfer increased by about 105 tab/d in October over the previous month. After increasing in September following the return from an explosion, the BTC pipeline has been operating at a reduced capacity of 850 tb/d. However, it is expected to resume shipments of 1 mb/d by the year-end.