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OPEC’s total petroleum production in the second half of this year is now set to be 600,000 barrels per day (bpd) lower than previous forecasts because of lower-than-expected ramp-up in output, the U.S. Energy Information Administration (EIA) said on Wednesday.
The EIA revised down its estimate for OPEC’s production in the August Short-Term Energy Outlook (STEO) compared to the July STEO. Last month, the U.S. administration expected that OPEC would raise production by more than the group ultimately agreed to in order to meet global demand.
As a result of the lowered estimate of OPEC’s oil production, the EIA also revised down its forecast for total world petroleum production. It now sees it at an average of 98.9 million bpd in the second half of 2021, down from a forecast of 99.4 million b/d in the July STEO.
“We expect most OPEC countries will fully comply with the agreement during 2H21,” the EIA said as it expects the cartel’s output to average 33.0 million bpd in H2 2021.
The EIA estimated that OPEC’s crude oil production would remain lower than calls on OPEC through the third quarter and fourth quarter of 2021. This quarter, demand for OPEC’s oil will exceed production by 1.0 million bpd. However, this difference will drop to 300,000 in the fourth quarter.
“[B]eginning in 1Q22, we forecast OPEC crude oil production will outpace calls on OPEC production, contributing to increased crude oil inventories and lower crude oil prices,” the EIA said on Tuesday, a day before the U.S. Administration urged OPEC+ to open the taps.
“OPEC+ leaders are expected to reconvene in December 2021, when we expect some adjustments to their curtailment plan,” the EIA said.
Despite calls from the Biden Administration for OPEC+ to boost production more than planned, the major oil forecasters scaled back last week their outlook on how much OPEC+ crude the market would need.