Global oil supply in November fell by 190,000 barrels per day (bpd) to 101.7 million bpd, breaking a five-month uptrend, the International Energy Agency (IEA) said in its monthly oil market report on Wednesday.
The supply declines were mainly driven by output cuts by Saudi Arabia and other Gulf countries in line with lower OPEC+ output targets.
However, the IEA said the overall decline was tempered by significantly higher flows from OPEC+ members Kazakhstan, Nigeria and Russia, along with increased output from non-OPEC+ outside the alliance.
As a result, production of oil from OPEC+ decreased by 470,000 bpd in November, while non-OPEC+ volumes rose by 290,000 bpd.
The EIA predicts a steeper drop in December as an EU ban on Russian crude imports and a G-7 price cap on exports take effect and non-OPEC+ production eases.
Although the OPEC+ countries confirmed a 2 million bpd supply cut decision, the agency stated that only Saudi Arabia and its Gulf neighbors would continue to pump at or near significantly lower quotas, as the majority of the bloc has been underproducing for some time.
Despite the OPEC+ curbs and further anticipated declines, mainly from Russia, the agency predicted that world production will overtake demand through the rest of 2022 and in the first quarter of next year.
Thus, world oil supply is forecast to rise by 770,000 bpd year over year to 100.8 million bpd in 2023.
Non-OPEC+ output is expected to increase by 1.9 million bpd, led by the US with over 970,000 bpd, Brazil with more than 300,000 bpd and Norway with around 270,000 bpd.
The IEA estimated that Russian output will fall by 1.4 million bpd under the impact of EU sanctions and the G-7 price cap.
-Global demand forecast increases for 2023
The report said that global demand will remain firm despite macro-economic headwinds, a global economy possibly heading for recession and the European energy crisis.
After revising up its forecast from last month by 100,000 bpd, the agency said global demand will rise by 1.7 million bpd to 101.6 million bpd next year.
The agency also noted that India has seen the fastest increase in oil consumption of any country.
The IEA said the world’s third-biggest oil consumer added 410,000 bpd of demand compared with one year earlier, and this trend is expected to continue next year before easing restrictions see China retake the top spot.
By Sibel Morrow
Anadolu Agency
energy@aa.com.tr