Opec’s oil export revenue for 2020 to hit 18-year low amid Covid crisis, EIA says
Opec’s net oil export revenue for 2020 is to hit an 18-year low, falling by more than 45 per cent from the previous year due to the coronavirus-induced slowdown.
The decline is based on “forecasts of lower global demand for petroleum products because of the general economic slowdown associated with Covid-19 that has reduced demand for petroleum products and Opec oil”, the US Energy Information Administration said in a report.
Opec’s net oil export revenue fell by about 17 per cent to $595bn in 2019 and was less than half the record of more than $1.2 trillion earned in 2012.
“The 2019 revenues fell because of lower crude oil prices and lower production levels ... which were the result of an increase in production disruptions and voluntary reductions of oil output among Opec members,” the agency’s report said.
On a per capita basis, Opec’s net oil export earnings for 2020 are expected to fall by about 47 per cent annually to $638.
They dropped by 19 per cent from $1,476 in 2018 to $1,201 a year later.
“The decline in expected net oil export revenue in 2020 is driven by continued voluntary curtailments and low crude oil prices,” the agency said.
Oil prices have surged by 10 per cent since the year began, buoyed by Saudi Arabia’s unilateral decision to cut 1 million barrels per day in February and March.
US production was as high as 12 million bpd at the beginning of last year. The industry is not expected to recover to historically high output levels anytime soon.
US benchmark West Texas Intermediate will rise to about $49.70 a barrel this year and increase slightly to $49.81 a barrel in 2022, according to the agency.
“US crude oil production is expected to fall to 11.1 million bpd this year, before recovering to 11.5 million bpd in 2022.”
Saudi Arabia’s commitment to deepen cuts is more of a “pre-emptive move”, NBK said in a note last Tuesday.
The Kuwaiti bank said the world’s largest oil exporter based its assessment on deteriorating oil demand.
“While oil demand appears to have beaten expectations in December, the current quarter is looking weaker than expected, with many advanced and emerging economies facing a second or even a third round of lockdowns,” said NBK.
The decline in expected net oil export revenue is driven by continued voluntary curtailments and low crude oil prices
US ENERGY INFORMATION ADMINISTRATION REPORT