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.”