Summary

Non-OPEC liquids supply growth in 2021 (including processing gains) was revised up by 0.27 mb/d from the previous assessment. The revisions are mainly due to the incorporation of the latest production adjustment decisions of the non-OPEC countries participating in the DoC, which have now been considered, following the successful conclusion of the 19th OPEC and non-OPEC Ministerial Meeting on 18 July 2021. Annual growth is now forecast at 1.1 mb/d y-o-y, to reach 64.0 mb/d, but still far from the highest level of non-OPEC supply of 66.9 mb/d in 1Q20 – before the oil market turmoil due to the
COVID-19 outbreak. In the US, operators have remained highly disciplined in 2020-2021. Nevertheless, rig count continue to rise, more wells are being fracked and more frac crews are deployed, as firms are again flush with free cash flow. The US liquids supply forecast has been revised up by 65 tb/d, owing to higher-than-anticipated production in April and May of 2Q21, and is forecast to grow by 0.12 mb/d y-o-y. Moreover, top European energy companies signalled confidence in a lasting recovery from the pandemic by drawing on higher oil prices to boost shareholder returns and reassure investors as they roll out risky climate strategies. The 2021 oil supply forecast primarily sees growth in Canada, Russia, China, the US, Norway and Brazil, while output is projected to decline in the UK, Colombia, Indonesia and Egypt.

The non-OPEC supply forecast for 2022 has been revised up by 0.84 mb/d, also reflecting the latest DoC production adjustment decision, and is now expected to grow by 2.9 mb/d to average 66.9 mb/d (including a recovery of 0.11 mb/d in processing gains). Including the expected growth of OPEC NGLs, liquids supply is forecast to grow by 3.1 mb/d. The main drivers of liquids supply growth are Russia (1.0 mb/d) and the US (0.78 mb/d), followed by Brazil, Norway, Canada, Kazakhstan, Guyana and other countries in the DoC. Nevertheless, uncertainty regarding the financial and operational aspects of US production remains high.

OPEC NGLs and non-conventional liquids production in 2021 is estimated to grow by 0.12 mb/d to average 5.17 mb/d. For 2022, it is forecast to grow by 0.13 mb/d to average 5.29 mb/d. OPEC-13 crude oil production in July increased by 0.64 mb/d m-o-m to average 26.66 mb/d, according to secondary sources.

Preliminary non-OPEC liquids production in July, including OPEC NGLs, is estimated to have increased by 0.33 mb/d m-o-m to average 69.0 mb/d, up by 2.45 mb/d y-o-y. As a result, preliminary data indicates that global oil supply increased by 0.97 mb/d m-o-m to average 95.69 mb/d, up by 5.79 mb/d y-o-y.