As the conflict in Syria drags on and Libya and Nigeria continue to produce at less than capacity, the International Energy Administration, or IEA, gave a surprisingly positive outlook on the oil markets in its monthly report, Platts noted Thursday.
Thanks to an increase in non-OPEC member production, which is expected to rise by 890,000 barrels of oil per day, or bpd, in the fourth quarter due to the boom in North American supplies, the increase helps to offset some of the decrease in production in other countries.
Libya’s oil production fell from 1.4 million to 150,000 bpd due to oil strikes as well as attacks on critical infrastructure. Nigeria’s production also has fallen, from 2.1 million bpd to 1.9 million bpd from last year, mainly due to oil theft.
However, in addition to North American oil supplies, Saudi Arabia has helped bridge some of the demand-supply gap by increasing its production to replace Libya’s decreased output. Saudi oil production went up to 10.19 million bpd last month, which is the highest it has been since the beginning of the 1980s, according to IEA.
Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution in Washington, told International Business Times that decreases in production from Nigeria, Libya “are not earth-shattering,” but when added to the “general uncertainty of the Syrian situation it feeds the speculators going into the market in anticipation that once a strike happens, it can send prices higher.”