OPEC market share remains above 2014 level – Deutsche Bank
Research Team at Deutsche Bank notes that the OPEC market share remains well above the 2014 level even after production cuts of -1.4 mmb/d since the October 2014 baseline.
Key Quotes
“Today, OPEC produces 40.2% of the world's crude oil, down from the recent 41.3% peak in August 2016, but still up considerably from the November 2014 level of 38.8%. After cutting production to defend the bottom of the USD 22-28/bbl price band in 2001, OPEC crude oil market share fell to 35.9% in April 2002.”
“On the assumption of two years of demand growth of 1.4 mmb/d, and OPEC production remaining flat at the February 2017 level of 32,005 kb/d, OPEC crude oil market share would fall to 38.9% in 2019. While this is considerably below the current 40.2% level, it would still be above the November 2014 level which arguably contributed to the decision to allow maximum output, and well above the April 2002 trough. More positively, on our OPEC-13 assumption of 32,300 kb/ d, OPEC crude oil market share would remain at 39.2% in 2019. The decline in market share over the three years from 2016 to 2019 of -2.1% to -2.5% would still be less than the -3.3% suffered in the six months between August 2008 and February 2009.”
“This suggests that while market share concerns may well re-emerge in the near future, an extension of the Algiers Accord through the end of 2018 may not be as farfetched as some may believe.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
