According to Dow Jones on February 12, Bank of America Merrill Lynch analysts said that OPEC’s share of the global oil market continued to decline, as the organization’s oil production stagnated and U.S. producers’oil production gradually increased.
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The OPEC member states, led by Saudi Arabia, have most of the world’s oil reserves, but production has stagnated in recent years, while funds have poured into American shale oil producers.
As a result, OPEC’s share of global oil supply has declined. Bank of America Merrill Lynch, in its report to clients, said it expects to maintain this momentum between 2019 and 2024 due to production cuts, sanctions and inadequate investment.
In 2018, OPEC reached an agreement with 10 non-OPEC oil producers, including Russia, to cut crude oil production by 1.2 million barrels per day in the first half of this year, which is one of the measures aimed at curbing market oversupply and boosting oil prices.
In addition, the bank expects that OPEC’s new capacity in the next six years will be lower than that in the past six years.
Between 2013 and 2018, new projects will bring about a total of 7 million barrels per day of new oil production to OPEC, while potential new projects between 2019 and 2024 will bring about nearly 4 million barrels per day of new oil production.
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Sanctions are expected to further limit Iranian production, which could fall below 10 million barrels a day in Saudi Arabia.
So Bank of America Merrill Lynch expects OPEC’s supply to drop from 31.9 million barrels a day in 2018 to about 29 million barrels a day in 2024, and its market share will decline accordingly in the medium term.
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