US EIA sees flat June OPEC output as Saudi rise offsets Iranian decline
OPEC crude oil production was essentially flat in June as Saudi Arabia’s output rose 200,000 b/d month on month while Iran’s output fell by 200,000 b/d, the US Energy Information Administration said.
EIA estimated total OPEC output at 29.9 million b/d, down 30,000 b/d from May to the lowest level since mid-2014.
Saudi Arabia pumped 10.1 million b/d in June, after three months below 10 million b/d, EIA said in its Short-Term Energy Outlook.
EIA estimated Iranian oil production at 2.1 million b/d in June, down from 3.78 million b/d a year earlier, before US sanctions were re-imposed.
STEO Highlights: EIA sees oil demand growing slower than previously expected
S&P Global Platts Analytics expects Iran’s crude and condensate exports to fall to 450,000 b/d in the second half of 2019, from 1.5 million b/d in the first quarter.
Venezuelan oil production fell to 690,000 b/d in June from 730,000 b/d in May, EIA said.
EIA expects Venezuelan output to continue declining through the end of 2020 as a result of US sanctions against state-owned oil company PDVSA, widespread power outages and inefficient management of the country’s oil industry.
The July 27 expiration of a license allowing some US drillers to continue operating in Venezuela will contribute to the production declines, EIA said.
Platts Analytics forecasts Venezuelan production to average 790,000 b/d in Q3 and 700,000 b/d in Q4.
S&P Global Platts estimates total OPEC production at 30.09 million b/d in June, with Saudi Arabia at 9.85 million b/d, Iran at 2.35 million b/d and Venezuela at 760,000 b/d.
RAPID DECLINES FROM IRAN, VENEZUELA
EIA expects OPEC production to average 30.19 million b/d in 2019 and 29.73 million b/d in 2020, down from 31.96 million b/d in 2018.
“The forecast decline is the result of Saudi Arabia’s overcompliance with the December 2018 OPEC+ agreement in the first half of 2019 and rapidly decreasing crude oil production in Iran and Venezuela,” EIA said.
OPEC and non-OPEC partners led by Russia agreed last week to extend their production-cut agreement through Q1 2020.
EIA expects the cuts to contribute to a draw in global stocks in Q3 before global inventories build in Q4, creating a “generally balanced market in 2020.”
Iraq and UAE will be the main sources of crude production growth among OPEC members in 2019, EIA said, with Iraqi output climbing further in 2020.
EIA said Iraq pumped 4.75 million b/d in June, down from 4.8 million b/d in May, and UAE pumped 3.15 million b/d in June, up from 3.1 million b/d in May.