Energy Prospectus

OPEC's crude oil production fell in February while the forecast for non-OPEC supply over the next year rose, the Organization of the Petroleum Exporting Countries and Russia stated in its monthly report.

Oil production fell by 77,000 barrels per day (bpd) in the last month, to an average of 32.19 million barrels per day, the report said.

Meanwhile the organization said non-OPEC supply growth for 2018 was forecast at around 1.60 million barrels per day compared to 1.40 million barrels per day prior.

OPEC said its efforts to cut supply continued to support rebalancing the market. The price of oil has been caught between a supply agreement by OPEC and the rise in U.S. crude. The U.S. overtook Saudi Arabia as the biggest oil producer in January. The news eased investor concern that the rise in U.S. crude could dampen the efforts made by OPEC to end a supply glut.

OPEC agreed in December to cut oil output by 1.8 million bpd until the end of 2018. The agreement was due to end in March 2018, having already been extended once.

From EIA:
Venezuela’s crude oil production has been on a downward trend for two decades, but it has experienced significant decreases over the past two years. Crude oil production in Venezuela decreased from 2.3 million barrels per day (b/d) in January 2016 to 1.6 million b/d in January 2018. A combination of relatively low global crude oil prices and the mismanagement of Venezuela’s oil industry has led to these accelerated declines in production.

Several factors indicate that Venezuela’s crude oil production will likely continue to decline. The number of active rigs has fallen from near 70 in the first quarter of 2016 to an average of 43 in the last quarter of 2017. Recent reports indicate that missed payments to oil service companies, a lack of working upgraders, a lack of knowledgeable managers and workers, and declines in oil industry capital expenditures have also contributed to production declines.

Full report: https://www.eia.gov/todayinenergy/detail.php?id=35312