Opec says oil glut nearly gone, makes supply pledge amid Iran worries


The cartel sees non-OPEC supply in 2018 growing by 1.7M barrels Y/Y, almost 90% coming from the U.S. Tight and shale formations are expected to average 5.76 million barrels a day, accounting for 94% of total US petroleum supply in 2018, according to OPEC.

Oil prices have been a bit of a roller-coaster ride so far this year, going up and down between its lowest point of $59 (£43) per barrel in February on the West Texas Intermediate (WTI) index to peaking earlier this month at nearly $72 (£53). That is just 9 million barrels above the oil-cartel's target of the last five-year average.

OPEC-14 crude oil production averaged 31.93 million barrels per day (mb/d) in April, an increase of 12,000 b/d from the previous month, OPEC said in its Monthly Oil Market Report for May.

Figures reported directly from OPEC members showed even deeper declines in production.

Crude oil prices have been on a tear this year, propelled by a combination of output curbs from OPEC and non-OPEC producers, firmer global economic growth and renewed geopolitical concerns in the Middle East.

The report comes roughly six weeks ahead of OPEC's semiannual official meeting in Vienna, at which the cartel and partner producers are expected to assess a joint agreement to rebalance the oil market by cutting crude production.

"Soaring U.S. shale output will continue to put a cap on prices", said Hussein Sayed, chief market strategist at futures brokerage FXTM.

USA drillers added 10 oil rigs in the week to May 11, bringing the total to 844, the highest level since March 2015, energy services firm Baker Hughes said on Friday.

The data adds to a healthy picture of global oil production, following last week's increase in US oil rigs to 844, the highest number in three years. Saudi Arabia said last week it was ready to offset any shortage but would not act alone.