The International Energy Agency (IEA) says despite the marked slowdown in Chinese oil demand growth, OPEC+ has yet to call time on its plan to gradually unwind voluntary production cuts starting in the fourth quarter of this year. However, on August 1, its Joint Ministerial Monitoring Committee (JMMC) reiterated that the group could pause or reverse its decision depending on prevailing market conditions.
“Our current balances suggest that even if those cuts remain in place, global inventories could build by an average 860 kb/d next year…” the IEA said on August 13. This could occur as non-OPEC+ supply increases of around 1.5 mb/d in 2024 and again in 2025 more than cover expected demand growth.
“The Americas quartet of the United States, Guyana, Canada and Brazil account for three-quarters, or roughly 1.1 mb/d, of non-OPEC+ supply gains in each of the two years,” the IEA said.
IEA: OPEC’s grip on global oil prices may weaken
For now, it said supply is struggling to keep pace with peak summer demand, tipping the market into a deficit. As a result, the IEA said global inventories have taken a hit. “After four months of gains, June saw oil inventories fall by 26.2 mb. Crude oil stocks dropped by 40.9 mb, even as China built substantially,” the IEA stated.
Guyana’s offshore oil production continues to rapidly increase with the addition of new developments and optimization of output at these projects. Currently, combined production at the Liza 1, 2 and Payara developments exceed 600,000 barrels of oil per day.
Guyana oil production could reach almost 1.5 million bpd by 2027
Production expansion is expected to continue with two more approved projects: Yellowtail and Uaru, each targeting 250,000 b/d to the production total. Yellowtail is on schedule for a 2025 start-up, and Uaru in 2026. Together they will add around 500,000 b/d to Guyana’s oil output. Additionally, the Whiptail project, which received approval in April, is expected to come online in 2027 with a similar capacity, boosting the combined additional production to 750,000 b/d. The Hammerhead project, planned for first oil in 2029, could add an additional 120,000-180,000 b/d in oil production capacity.
