If the production cut agreement of the Organization of the Petroleum Exporting Countries (OPEC) ends in March 2018, there will be a projected 2.4 million barrels per day (b/d) year-on-year increase in global oil supply for 2018, Macro Oils Vice President at Wood Mackenzie, Ann-Louise Hittle, said in a press release Tuesday.
Ahead of Thursday’s OPEC meeting, Hittle said that during the Nov. 30 full ministerial OPEC meeting, a decision is expected on an extension of the production restraint agreement beyond the current expiry of the end of March 2018.
“Based on the early readings of the OPEC meeting, and statements from Russia's oil minister, it looks as if an agreement to extend to the end of 2018 is nearly concluded after talks ahead of the full session,” she noted.
If the production cut agreement ends in March 2018, Wood Mackenzie forecasts show a projected 2.4 million barrels per day (b/d) year-on-year increase in world oil supply for 2018 compared with 1.8 million b/d if the production restraint continues through to the end of 2018, she noted.
“Without the extension, the larger increase in supply next year would lead to an implied stock build in each quarter of 2018 and put downward pressure on oil prices,” Hittle concluded.
By Ebru Sengul
Anadolu Agency
energy@aa.com.tr