Global Oil Output Hit New Record Pending Promised OPEC Cuts

The agency now expects US oil output to average 8.84 million barrels a day this year and 8.73 million barrels a day next year, up from its earlier forecasts of 8.73 million in 2016 and 8.59 million in 2017.

In the meantime, Saudi Arabia – the cartel’s biggest producer, lowered its production by 20,000 bpd. The cartel now forecasts the demand for OPEC crude at 32.7 million barrels a day in 2017, up by 100,000 since the September report.

In an attempt to boost prices, the Organisation of the Petroleum Exporting Countries agreed in September to cut output, although investor doubts have grown that it will be able to implement the deal at its next meeting on November 30.

Even before OPEC’s latest production increase, it was seen waffling on actually implementing a cut at its meeting in Vienna on November 30. “Although this is a very large drop, to the lowest monthly import level since January 2016, it is still up 8 percent year-on-year”, Barclays said.

Prices could be pressured by increased USA oil output given Trump’s pledge to open all US federal land and waters for fossil fuel exploration.

“Investors have brushed aside the shock of the Trump victory in the US election”, ANZ bank said.

Global oil markets may run into a third straight year of oversupply in 2017 unless the OPEC agrees to cut output, the International Energy Agency warned on Thursday. U.S. crude gained 1 cent to $44.99.

Production by the 14 members of OPEC rose to a record 33.83 million barrels a day in October, the IEA said, just weeks ahead of talks aimed at hammering out a deal to curb production.

Traders said a crude and refined product glut that has dogged markets for over two years was dragging on prices. The market will be looking to see if OPEC can recognize this fact and is willing to take concrete action to reduce its own supplies and prop up global oil prices.

Oil prices tumbled on Wednesday as vote counting showed Donald Trump edging ahead in an unexpectedly tight United States presidential election, throwing world markets into turmoil in a result reminiscent of June’s Brexit vote. The report also commented on the amount of effort needed to make this deal come to fruition, as current OPEC output is well above the targeted reduction, and would require major producers to cut it heavily.

Non-OPEC production is expected to grow at a rate of 500,000 bpd next year, compared with this year’s 900,000 bpd fall.

The initial market shock, which began on Wednesday when it was apparent Trump had won the general election, prompted Ian Bremmer, president of risk consultancy Eurasia Group, to say that the “world is heading into a profound geopolitical recession”.