BP CEO predicts that non-OPEC+ oil supplies could decrease by April

BP Chief Executive Murray Auchincloss stated on Monday that oil supply growth outside OPEC+ may decline by April while demand remains strong.

Auchincloss stated that "there is a supply rise outside of OPEC+." "We believe that will end in February, March and April. After that, we're likely to see flat or declining production outside of OPEC+."

Auchincloss, who spoke at the ADIPEC Energy Conference in Abu Dhabi, said that future oil prices will be determined by three factors: OPEC+ decision, Chinese stockpiling, and the impact on sanctions.

He said, "It is a very serious sanctions environment at the moment which dampens supply." He remains confident about the long-term growth of demand despite short-term uncertainty. Aviation and petrochemicals are two examples.

The comments follow OPEC+ – a group of oil producing nations, including Saudi Arabia and Russia – agreeing on Sunday to a small increase in oil production for December. However, the group will not be increasing output in the first quarter next year. This is because the group has moderated plans to regain a market share in response to growing fears about a glut of supply. The oil prices have fallen by about 13% in the past year.

Auchincloss believes that oil investment is a good long-term decision. The industry must expand to places like Abu Dhabi, Iraq and Libya in order to meet the demand growth.

Patrick Pouyanne, CEO of TotalEnergies, said that the annual growth in oil demand was increasing steadily by around 1%. China's growth in oil demand has slowed down to 300,000 barrels a day from 600,000. India, however, is a new force with 200,000 barrels / day.

Both executives who spoke at the same panel stressed the importance of continued investment.

Pouyanne stated that "OPEC unwinds part of its capability, and the faster they unwind this quarter, the less spare capacity they will have." "We may face a situation where there is a lower price and less investment. There will be less spare capacity. Then prices could go back up." Reporting by Yousef SABA, Jana Choukeir and America Hernandez; editing by Louise Heavens, Susan Fenton and Shadia N. Nasralla

(source: Reuters)