अति आपूर्ति (en. Oversupply)

The persistence of high U.S. output in first half of 2019, when global consumption was growing at the slowest rate since 2014 and before that 2012, contributed to significant oversupply.

This is because U.S. oil production is now rising so sharply that there is a risk of renewed oversupply if OPEC does not voluntarily renounce market share.

After years of declining orders due to low oil prices and an oversupply of rigs and supply vessels, Singapore’s offshore and marine industry is hoping that demand will return as oil majors ramp up spending on exploration and production.

While it’s still likely that there may be some oversupply this year, and perhaps until the early 2020s, the market reality is that new LNG buyers in Asia and a surge in Chinese demand has eaten away most of the expected surplus.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - a grouping known as OPEC+ - agreed to more output cuts to avert oversupply early next year as economic growth stagnates amid the U.S.-China trade war.

Saudi Arabia's energy minister said on Wednesday he was confident that supply cuts started in late 2018 by the Organization of the Petroleum Exporting Countries (OPEC) and some allies, including Russia, aimed at reining in oversupply would bring the oil market into balance.

The lesson for operators is twofold: not every operator will survive the current challenging climate, and restructuring alone will not solve the industry’s chronic oversupply problem.