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Non-OPEC Crude Oil Production: Will It Impact Oil Prices in 2017?

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Dec. 4 2020, Updated 10:52 a.m. ET

Non-OPEC crude oil and other liquid production  

The EIA (U.S. Energy Information Administration) estimates that non-OPEC (Organization of the Petroleum Exporting Countries) crude oil and other liquid production rose ~0.5 MMbpd (million barrels per day) to 57.4 MMbpd in November 2016—compared to the previous month. Non-OPEC crude oil and other liquid production rose 0.9% month-over-month, but fell 1.0% YoY (year-over-year). A rise in non-OPEC crude oil production could pressure (BNO) (PXI) (USL) (ERX) (ERY) crude oil prices. For more on crude oil prices, read Part 1 of the series.

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Non-OPEC crude oil production

The latest figures from the EIA suggest that non-OPEC crude oil production rose by 350,805 bpd (barrels per day) to 44.6 MMbpd (million barrels per day) in September 2016—compared to the previous month. Non-OPEC crude oil production rose 0.80% month-over-month, but fell 1.5% YoY.

Canada, the US, Russia, Brazil, and China are the major non-OPEC crude oil producers. Crude oil production from Canada and the US rose in 2014 and 2015. Production increased due to technological advancement, cheaper credit facilities, and higher crude oil prices between 2010 and 2014.

The rise in non-OPEC production over the last few years contributed to the rise in global supplies. With demand not being able to keep up with supply, crude oil prices fell. When supply exceeds demand, inventories rise. Look at our latest analysis of US and OECD crude oil inventories in Part 8 and Part 9 of this series.

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Non-OPEC crude oil production estimates in 2017 

The EIA estimates that non-OPEC crude oil and other liquid production could rise 350,000 bpd to 57.2 MMbpd in 2017 compared to 2016. The major rise in production during this period would be driven by the US. To learn more about US crude oil production, read Part 7 of this series.

The International Energy Agency forecast that non-OPEC supplies will rise by 500,000 bpd in 2017 compared to 2016.

Impact of non-OPEC crude oil production on oil prices, stocks, and ETFs

The expectation of rising non-OPEC production in 2017 will pressure crude oil prices. Lower crude oil prices impact national and international oil producers such as Stone Energy (SGY), W&T Offshore (WTI), ExxonMobil (XOM), Chevron (CVX), Devon Energy (DVN), and Laredo Petroleum (LPI).

Moves in crude oil prices also influence ETFs and ETNs such as the ProShares UltraShort Bloomberg Crude Oil (SCO), the iShares US Oil Equipment & Services (IEZ), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), and the SPDR S&P Oil & Gas Equipment & Services ETF (XES).

In the next part of this series, we’ll take a look at how Libya, Iran, and Nigeria could impact crude oil prices in 2017

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