Saudis sees NON-OPEC oil supply drop accelerating after 2016Staff writer ▼ | November 10, 2015
Oil production from non-OPEC suppliers is expected to drop in 2016, after three years of positive growth, Saudi Arabia's Vice Minister of Petroleum and Mineral Resources Abdulaziz bin Salman al-Saud said.
Oil industry Oil demand continues to grow
"Beyond 2016, the fall in non-OPEC supply is likely to accelerate, as the cancellation and postponement of projects will start feeding into future supplies, and the impact of previous record investments on oil output starts to fade," Abdulaziz told the 6th Asian Ministerial Energy Roundtable in Doha.
Despite the global macroeconomic uncertainty, oil demand continues to grow at a robust pace and is set to increase by 1.5 million b/d in 2015, the strongest growth seen in the past few years, he said.
"This is in contrast to the early 1980s when global oil consumption fell between 1980 and 1984 by more than 2.3 million b/d," he said.
Explaining why the current oil market scenario was different from the one in the 1980s, Abdulaziz said in 1985, global oil consumption stood at just over 59 million b/d and the available spare capacity was at a historical level of over 10 million b/d, and a ratio of spare capacity to global oil demand was about 17%.
But in contrast, oil consumption in 2015 is estimated to reach 94 million b/d, while usable spare capacity, mainly held in Saudi Arabia, is estimated at 2 million b/d, meaning the ratio of spare capacity to oil consumption of about 2%.
"This is one of the few industries in the world that is operating at such a thin cushion," he added. ■