Global oil production will decline
According to Morgan Stanley, next year world’s oil production may decline by 500K barrel a day compared with the previous forecast. The analysts think that this may happen because of the decline in spending of the leading producers.
Some companies (Total, Chevron, Statoil, BP, Exxon Mobil and Eni) may either cancel or put off the developments of their projects in 2016. This will lead to the daily decline of oil production by 530K barrels in the next year and reduce production to 1.2B barrels a day by 2020. Note that the share of these companies in the world’s production accounts for 13%.
Morgan Stanley also notes that the companies mentioned above may reduce their expenditure even more in the coming months. This will lead to a 3-year decline starting with the past year more than by 30%. Such trend was witnessed during the previous collapse in oil prices as well.