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World Oil Supply

44

OPEC Monthly Oil Market Report – August 2017

OECD Americas

OECD Americas’ oil supply

in 2017 is estimated to average 21.27 mb/d. This represents growth of

0.70 mb/d y-o-y. This is mainly due to production recovery in the US and Canada compared to last year,

while Mexican output is expected to show a heavy decline. Assuming at least a WTI price to breakeven,

US liquids production in 2018, particularly tight crude, is expected to grow by 0.84 mb/d – 0.62 mb/d from

tight crude – to average 15.13 mb/d, excluding processing gains. Growth of 0.19 mb/d in Canada is expected

for the next year following continuation of new oil sands projects development to see an annual average of

4.86 mb/d. Assuming an annual decline rate of at least 8.5% in Mexico, their production will decline by

0.17 mb/d to average 2.13 mb/d including all liquids.

Graph 5 - 7: OECD Americas quarterly oil supply,

2016-2018

Graph 5 - 8: US quarterly oil supply,

2016-2018

US

US liquids production

increased by 193 tb/d m-o-m in May to reach 14.20 mb/d, with y-o-y growth rising to

0.48 mb/d. US crude oil production in May 2017 rose by 59 tb/d m-o-m to average 9.17 mb/d. This was

mainly due to production increasing in Texas by 78 tb/d to average 3.43 mb/d and higher output in

New Mexico (14 tb/d) and Colorado (10 tb/d). Production declined in North Dakota (-12 tb/d) and Alaska

(17 tb/d). Following the drop of more than 100 tb/d in April due to the temporary shutdown during annual

maintenance work, oil output from the GoM remained more or less at the same level of 1.66 mb/d in May,

although output was higher y-o-y by 68 tb/d.

US NGLs production

rose by 0.13 mb/d y-o-y to average 3.72 mb/d. Ethane grew to 1.40 mb/d, up by

44 tb/d y-o-y. Propane output from gas plants increased by 45 tb/d y-o-y and butanes by 23 tb/d. However,

other liquids (unconventional liquids such as biofuels, oil shale, etc.) declined by 52 tb/d m-o-m to average

1.26 mb/d in May, partially offseting the growth in crude oil and NGLs. Following the revision on the different

components of US production by EIA, the monthly changes in May 2017 indicates that tight crude output

doubled from April’s 63 tb/d to reach 4.56 mb/d while production of other crudes including the GoM

decreased by a minor 4 tb/d to average 4.60 mb/d. Unconventional NGLs and conventional NGLs grew

m-o-m by 67 tb/d and 21 tb/d to average 2.72 mb/d and approximately 1 mb/d, respectively. Other liquids,

mainly biofuels, increased by 46 tb/d m-o-m to total 1.3 mb/d. The US liquids production breakdown,

including annual changes in 2016 and those forecast for 2017 and 2018, are seen in

Table 5 - 4

.

18.5

19.0

19.5

20.0

20.5

21.0

21.5

22.0

22.5

23.0

1Q

2Q

3Q

4Q

mb/d

2016 2017 (Forecast)

2018 (Forecast)

Source: OPEC Secretariat.

12.0

12.5

13.0

13.5

14.0

14.5

15.0

15.5

16.0

1Q

2Q

3Q

4Q

mb/d

2016 2017 (Forecast)

2018 (Forecast)

Source: OPEC Secretariat.