Q3 oil supply deficit most in a decade, says Opec

The oil market was in the biggest supply deficit since early 2007 in the third quarter, as attacks on Saudi Arabia’s energy industry deepened production cuts from Opec and its partners. Oil demand outstripped supply by more than 2.5mn barrels a day from July through September, according to Opec’s Monthly Oil Market Report. The last time there was a bigger shortfall was the first quarter of 2007, which saw a 2.53mn barrel a day gap, Opec said. Despite that, benchmark crude prices fell 8.7% over the same period as the market continued to be dominated by concerns over the health of the global economy, rather than supply disruptions.

Output by the Organization of Petroleum Exporting Countries declined by 1.32mn barrels a day on a monthto-month basis in September, with Saudi production alone plummeting by 1.28mn. Still, the subsequent rebound in the kingdom’s output and renewed trade tensions between the US and China hampered crude prices after an initial spike.

Global benchmark Brent is now trading about $2 lower than where it was before the September 14 attacks on Opec’s largest producer.

The sharp drop in output meant that the group wasn’t able to reach the production needed for it to help meet world demand. While Opec output was 29.3mn barrels a day in the third quarter, it would have needed to produce 31.8mn to keep pace with global consumption.

Global oil demand was 100.7mn barrels a day during the period. NonOpec supply and Opec production of non-gas liquids filled 69.9mn barrels of that amount daily, according to the report.

Several other Opec members curbed output in September. Iraq, Venezuela and Iran lost a combined 176,000 barrels a day of supply.