MOSCOW, December 4. /TASS/. Considering spare capacity among OPEC nations low, the World Bank suggests that oil price spikes are probable in 2019 in the event of a sudden shortfall in the oil supply, according to Russia Economic Report released on Tuesday.
"The level of spare capacity among OPEC members is estimated to be low at present, suggesting there are limited buffers in the event of a sudden shortfall in supply of oil, raising the likelihood of oil price spikes in 2019," the report said.
Non-OPEC oil production is expected to increase by 2 mln barrels per day in 2019, "with much of the additional supply coming from the United States despite significant bottlenecks such as a lack of pipeline capacity and labor shortages," the World Bank said. Its experts suggest that the outlook for oil prices depends heavily on supply from OPEC members as non-OPEC oil supply growth is expected to be greater than that of global demand.
"Saudi Arabia has raised the possibility of new production cuts by OPEC and non-OPEC members, of around 1 mln barrels per day, in response to the recent weakness in oil prices, although it would have to convince other countries, notably Russia, to also participate. Production is expected to continue to decline in Venezuela and will likely fall in Iran when the waivers expire in 2019, although there is uncertainty about the speed and size of these developments. In addition, geopolitical risks remain elevated in other key oil producers, such as Libya," the report said.
Russian Energy Minister Alexander Novak said earlier on Tuesday that OPEC+ ministers would continue the talks on reduction of crude oil output in 2019 at the meeting on Wednesday, December 5. Russia together with Saudi Arabia play a key role in the OPEC+ agreement. Both countries have not yet reached a consensus on volumes of oil production cut in 2019. Earlier Bloomberg reported with reference to sources that Russia is ready to reduce output within OPEC+ by around 150,000 barrels per day in 2019.
A source in one of delegations told TASS earlier that the OPEC+ Technical Committee, which met in Vienna on Monday, did not make a recommendation to the Joint Ministerial Monitoring Committee regarding oil production cuts.
The Joint Ministerial Monitoring Committee will meet on Wednesday. It comprises six countries and its work is steered by Russia and Saudi Arabia.