Oil output from producers outside the Organisation of Petroleum Exporting Countries (OPEC) is falling faster than expected, helping the market to rebalance, according to The Telegraph.
Non-Opec oil producers are expected to lower their supply by 740,000b/d in 2016, to an average of 56.40mb/d – less than forecast, OPEC’s latest market data showed.
OPEC members failed to agree on a production freeze earlier this year, and both Saudi Arabia and Iran are expected to boost output in the coming months in a bid to retain their respective market share. But oil prices have nonetheless continued to creep higher from record lows in January.
The OPEC reference price for oil averaged $37.86 a barrel in April, up 9.3% from the month before and 40% higher than the lows reached in the beginning of the year, “buoyed by expectations for an improving market situation,” according to OPEC’s May report.
“There have been consistent signs of declines in non-OPEC production which should likely flip the global oil market into a net deficit in 2017,” GMA News Online quoted the OPEC report.