Oil prices remain below $30 a barrel on Monday but the Organization of the Petroleum Exporting Countries (OPEC) believes prices will eventually stabilize in 2016.
“After seven straight years of phenomenal non-OPEC supply growth, often greater than 2 million barrels a day, 2016 is set to see output decline as the effects of deep capex cuts start to feed through,” the group said in a closely monitored report.
While the organization plans to continue its own output of more than 2 million barrels per day, it believes non-OPEC production will eventually slip below 700,000 barrels a day in 2016.
The biggest decline according to the cartel will be experienced in the United States. OPEC believes American oil production will fall by nearly 400,000 barrels a day.
The agency also expects oil production to fall in Canada, the North Sea, Latin America and parts of Asia. All projects in Canada are already below costs.
OPEC’s own oil production fell by 200,000 barrels a day in December, but output still remains elevated on a global level for the oil cartel.
In the coming months an increase in oil output is expected as Iran re-enters the market following the removal of US sanctions against the country.