OPEC maintains forecast for non-OPEC liquids supply growth in 2022 and 2023, forecast for Russia raised by 250,000 bpd in 2022

MOSCOW. Aug 11 (Interfax) - OPEC has virtually maintained its forecast for growth in supplies of liquids from non-OPEC countries in 2022 and 2023, OPEC said in a monthly report.

The 2021 projection for supply has been raised by 70,000 barrels per day and that for 2022 by 60,000 bpd, while the rate of growth remains almost unchanged with non-OPEC oil supply expected to grow by 2.14 million bpd to 65.8 million bpd in 2022.

"Upward revisions to Russia's oil production [10.88 million bpd in 2022 compared to projections of 10.63 million bpd a month ago] were offset by downward revisions to the U.S., Norway, and Kazakhstan. Significant uncertainty regarding Russia's liquids production in the forecast period remains," OPEC said, meaning that it expects growth in production of 80,000 bpd in Russia in 2022 compared to last year. Last month's estimate was raised due to higher than expected production for the last two months.

Russian liquids production is expected to fall by 0.4 million bpd in 2023 to average 10.5 million bpd. "It should be noted that the Russian oil forecast is subject to high uncertainty," OPEC said.

"In the U.S., solid increases in oil and gas rig counts, as well high fracking activity, are expected to support production going forward. However, ongoing capital discipline by public operators, who are focusing on paying down debt and increasing returns to shareholders, labor and supply chain issues, as well as cost inflation, are expected to limit growth," OPEC said.

"Moreover, forecasts for above-normal hurricane season activity, as well as an upward revision to the historical base line, have necessitated a downward revision to the U.S. liquids supply growth forecast for 2022 by 138,000 bpd, and output is now forecast to grow by 1.15 million bpd y-o-y," it said.

Analysts have raised the 2021 estimate for liquids production in the U.S. by 70,000 bpd to 17.82 million bpd, but lowered it by 0.7 million bpd to 18.97 million bpd for 2022. As a result, if supply growth of 1.3 million bpd was expected earlier, then it is now expected at 1.15 million bpd.

"The production forecast for Norway was also revised down due to lower-than-expected output in Q2 2022, extended fields maintenance, and gas injection plan changes in H2 2022. The main drivers of liquids supply growth for the year are expected to be the U.S., Canada, Brazil, China, and Guyana, while production is expected to decline mainly in Indonesia and Thailand," OPEC said.

Growth in liquids production in non-OPEC countries is also expected to remain unchanged in 2023 and to grow by 1.7 million bpd to 67.5 million bpd.

"Liquids supply in the OECD countries is forecast to grow by 1.6 million bpd, while the non-OECD region is forecast to grow by 0.1 million bpd," OPEC said.

"The main drivers for liquids supply growth are expected to be the U.S., Norway, Brazil, Canada, and Guyana, whereas oil production is forecast to decline mainly in Russia and Azerbaijan. Nevertheless, uncertainty about U.S. production growth and the geopolitical situation in Eastern Europe remains high," it said.

Liquids production in Russia is expected to decrease by 370,000 bpd to 10.52 million bpd compared to the previous forecast of 10.43 million bpd in 2023.

"OPEC NGLs and non-conventional liquids production in 2022 is forecast to grow by 0.1 million bpd to average 5.39 million bpd. For 2023, it is forecast to grow by 50,000 bpd to average 5.44 million bpd," OPEC said.