Africa’s oil supply to decline by 30,000bpd in 2016

THERE are indications that Africa’s oil supply would decline by 30,000 barrels per day (bpd) to average 2.31million bpd in 2016, going by the projections of the Organisation of Petroleum Exporting Countries (OPEC).

The cartel, in its 2015 World Oil Outlook, said oil production in Congo and Africa is expected to grow, while others are forecast to decline, with the exception of South Africa, which is expected to remain steady.
On a quarterly basis, Africa’s oil supply in 2016 is forecast to average 2.32mbpd, 2.32mbpd, 2.31mbpd and 2.29mbpd, respectively.

Meanwhile, world oil demand is anticipated to increase by 1.53mbpd this year, averaging around 92.88mbpd. These projections are 30,000 bpd higher than last month’s estimate, mainly as a result of better-than-expected consumption in OECD Europe and Other Asia.

For 2016, global oil demand growth is expected to increase by about 1.25mbpd, unchanged from the previous report, averaging 94.13mbpd.

Non-OPEC oil supply is estimated to grow by 1.00mbpd in 2015 to average 57.51mbpd. This represents an upward revision of 0.28mbpd from the previous report, driven mainly by actual production data from the US, UK, Brazil, Russia and China.

Non-OPEC oil supply in 2016 is expected to contract by 0.38mbpd to average 57.14mbpd, following a downward revision of 0.25mbpd. OPEC NGLs are expected to grow by 0.17mbpd in 2016, compared to an increase of 0.16mbpd this year.
In November, OPEC production according to secondary sources rose by 230tbpd from the previous month to average 31.70mbpd.

Meanwhile, the West African (WAF) crude oil price differentials remained under pressure as weaker refining margins in Europe weighed on demand for the substantial November loading surplus.

Opec said with more than 40 million barrels of Mediterranean and North Sea crudes seeking buyers, the prospects were not good for differentials.

According to a new monthly report, December official selling prices for Nigeria’s crudes hit their lowest level in more than 10 years.
“Towards the end of the month, a larger-than-usual purchase from India’s IOC supported West African crude oil, but a nagging backlog of cargoes kept a lid on any movement in differentials,” it stated.

However, Middle East price differentials were underpinned by strong demand as refiners benefited from low oil prices and high naphtha cracks to secure cargoes.
Medium grades tracked lighter grades as refiners rushed to secure cargoes amid tighter supply as more Middle East crude flows to Europe and low prices. Robust diesel and fuel oil cracks supported medium grades.

Brent-related West and Northern African light sweet Basket components Saharan Blend, Es Sider, Girassol and Bonny Light saw their values decreaseby$4.13 or 8.5 per cent to $44.54 per barrel in November.

Middle Eastern spot component grades slipped by $3.86 to rest at $43.83 per barrel, while multi-destination grades Arab Light, Basrah Light, Iran Heavy and Kuwait Export plunged $5.10 to stand at $39.16 per barrel.
Latin American ORB component Merey was down by $3.11 or 10.2 per cent to stand at $30.17 per barrel while Oriente declined by about $3.51 or 8.8 per cent toreach$36.40 per barrel.