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Last week, Stratas Advisors published its third quarter global crude supply outlook. When readers compare Stratas data with IEA, they will notice a 10+ million b/d gap between the two sets of Non-OPEC supply numbers (Figure 1). This upstream extra article aims to explain the variance between Stratas and IEA supply numbers for Non-OPEC countries.
The 10+ million b/d gap in question is mostly attributable to differences in liquids categorizations between IEA and Stratas Advisors. While IEA’s total Non-OPEC liquids include crude oil, condensate, NGL, biofuel, and processing gains; Stratas Advisors only considers crude oil and field condensate in its liquids supply estimate. When non-crude/condensate components are removed from IEA liquids supply, the remaining historical data matches with Stratas Non-OPEC figures (Figure 2).
However, note that even after the adjustments, the IEA outlook for 2020 Non-OPEC supply is still approximately 660,000 b/d higher than Stratas projections. This is because Stratas adopts its own price assumptions and forecast methodologies for its upstream models. In particular, the Stratas forecast for US crude and condensate production in 2020 averages 12.3 million b/d, 970,000 b/d lower than IEA outlook (13.3 million b/d). Stratas believes this is due to a more conservative approach to its US forecasting due in part to ongoing declines in US rig activity and more limited access to capital markets.
Starting the next update cycle, Stratas will add IEA-Stratas data comparison features to its quarterly supply outlook. Stay tuned for the fourth quarter forecast, which is scheduled to be pushed out this December!