OPEC’s Crude Oil Production after the Production Cut Deal Expires
OPEC’s crude oil production
The EIA (U.S. Energy Information Administration) reported that OPEC’s crude oil production rose by 390,000 bpd (barrels per day) to 32.12 MMbpd (million barrels per day) in May 2017—compared to April 2017. OPEC’s crude oil production is at the highest level in the last four months.
Production rose 1.2% in May 2017—compared to April 2017. However, it fell 0.2% from the same period in 2016. The rise in OPEC’s production is bearish for crude oil (XES) (BNO) (SCO) prices. Lower crude oil prices have a negative impact on oil and gas producers’ earnings like Noble Energy (NBL), SM Energy (SM), Sanchez Energy (SN), and Apache (APA).
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Crude oil production estimates
OPEC’s crude oil production averaged 32.53 in 2016 and 31.5 in 2015, respectively. OPEC extended the production cut deal on May 25, 2017. The expectation of a fall in OPEC’s production in 2017 could support oil prices. The EIA estimates that OPEC’s crude oil production would average 32.30 in 2017 due to the production cut deal.
OPEC’s crude oil production would average 32.77 in 2018—1.5% higher than production in 2017. Russia’s production would also rise in 2018. The rise in Russia and OPEC’s crude oil production in 2018 would weigh on crude oil prices. US crude oil production is expected to hit record in 2018. Read What Could Offset OPEC’s Crude Oil Production Cut Deal? to learn more.
In the next part, we’ll discuss some crude oil price forecasts.