Tuesday, April 20, 2010
Clearly, OPEC Lost Control Of Oil In March
Non OPEC global oil supply increased in March and is now expected to average 51.53 million barrels per day (mb/d) for 2010, which is a 0.50 mb/d increase over 2009 according to Hellenic Shipping News (HSN). It is also an increase of 0.10 mb/d to the 2010 forecast from just a month ago.
Russia supply in March marked a new post-Soviet record oil supply from Russia is expected to grow by 0.09 mb/d over 2009 to average 10.01 mb/d in 2010, representing an upward revision of 20 tb/d from recent evaluations. The healthy production figure in the first quarter, which came higher than previously expected, necessitated the upward revision. Russia oil production reached a new post Soviet record in March following strong production levels in January and February.
China supply to increase by 80 tb/d in 2010 China’s oil production is estimated to average 3.93 mb/d in 2010, an increase of 80 tb/d over the previous year and an upward revision of 40 tb/d from the previous month. The strong production figures from the first two months required the upward revision, which was the highest in the first quarter compared to other non-OPEC countries’ revisions.
Meanwhile, OPEC members continue to violate their group's production quota's and over produce. OPEC output rose 5.6% year over year in March to 29.2 mb/d. While OPEC says it would 'mull an output boost' at $100 oil, note they are already increasing output thanks to violations. So one has to wonder if $100 can even be reached, sustainably, despite some forecasts in the market.
OPEC's reference price for a basket of 12 crude oil types just dropped by $1.97 to $80.89 per barrel.
Reporter Vincent Fernando can be reached at The Business Insider
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