Despite fears of disruptions to global oil supplies and curbs on production, major oil producing group OPEC sees global oil supplies as fine – it's demand that should be worrying people.
The 15-member OPEC said Wednesday in its latest monthly report that preliminary data suggested that the global oil supply increased 490,000 barrels a day to average 98.9 mb/d in August, compared with the previous month.
In 2018, OPEC believes the non-OPEC oil supply in 2018 will grow by 2.02 million barrels a day (mb/d) despite making a downward revision of 64,000 b/d from its last report. In 2019, non-OPEC oil supply is expected to grow by 2.15 mb/d, a minor upward revision of 17,000 b/d.
Meanwhile, OPEC's supply is also rising.
According to secondary sources (that is, not the producers themselves) total crude oil production by OPEC members averaged 32.56 mb/d in August, an increase of 278,000 b/d over the previous month.
Crude oil output increased mostly in Libya, Iraq and Nigeria, while production declined in Iran, Venezuela and Algeria.
Iran is due to be hit with sanctions on its oil industry from November onwards while Venezuela is experiencing economic and political upheavals, affecting production.
Oil production by OPEC's defacto leader Saudi Arabia has ticked up since May, when it and Russia signalled that they could increase output to fill any supply shortages due to incoming U.S. sanctions on Iran's oil industry.
The increase comes despite an ongoing deal between OPEC and non-OPEC producers, notably Russia, to curb oil production (and limit it to 32 million barrels a day) in order to support prices. The deal, in place since late 2016, has effectively lifted prices from a slump in 2015 to current levels of around $79 a barrel for Brent crude and $69 for U.S. West Texas Intermediate.
The latest data from OPEC, collected both by direct communication with producers and from secondary sources, shows a contrasting picture of production in Iran as it faces impending oil sector sanctions.