After many months of poor output, Nigeria, last month, ramped up production, albeit marginally, by 171,000 barrels according to OPEC data, even though the cartel’s crude oil production in November, fell by an average of 744,000 barrels per day.
Also, the Organisation of the Petroleum Exporting Countries (OPEC) yesterday, left its key projections for oil supply and demand unchanged in its latest Monthly Oil Market Report (MOMR).
Saudi Arabia’s November production fell by the most among its members, by 404,000 bpd, to 10.474 million bpd—Saudi Arabia’s lowest monthly average since May 2022.
Other significant production decreases were realised by the United Arab Emirates, which saw a decrease of 149,000 bpd in November, landing at 3.037 million bpd; Kuwait, which saw a dip of 121,000 bpd to 2.685 million bpd; and Iraq with a loss of 117,000 bpd to 4.465 million bpd.
Overall, OPEC’s average production for November fell to 28.826 million bpd—the lowest average production level since June.
Angola, Gabon, and Nigeria went the other way, increasing their production by a collective 132,000 bpd.
OPEC forecasts global oil demand to grow by 2.55mn b/d to 99.6mn b/d this year, followed by a 2.25mn b/d increase to 101.8mn b/d in 2023. Next year’s growth will be supported by “expected geopolitical improvements and the containment of Covid-19 in China”, the cartel said.
OPEC cautioned, however, that the current unchanged outlook from last month “assumes the successful containment of COVID-19 and a resumption of pre-pandemic economic growth in China, while India’s oil demand is projected to be supported by continued healthy economic growth.
“As the year 2022 draws to a close, the recent global economic growth slowdown with all its far-reaching implications is becoming quite evident. The year 2023 is expected to remain surrounded by many uncertainties, mandating vigilance and caution,” the cartel warned.
OPEC forecasts demand in China will rebound by 530,000 b/d in 2023 after falling by a projected 180,000 b/d this year, even as it expects Beijing to relax Covid-related restrictions in most regions by the end of March next year.
The cartel also warned that several challenges lie ahead for the global economy, including further monetary tightening measures by major central banks if inflation remains persistently high.
“Rising interest rates will be a cause for concern for countries with high sovereign debt levels,” it said. “Tight labour markets, amid calls for higher wages, will add pressure, as will continued supply chain issues.”
OPEC has left its oil supply projections broadly unchanged — non-Opec supply is forecast to increase by 1.89mn b/d this year and by 1.54mn b/d in 2023. It expects America, Norway, Brazil, Canada, Kazakhstan and Guyana to drive non-OPEC supply growth next year, while oil production in Russia and Mexico is forecast to decline.
OPEC has reiterated that “large uncertainties” remain around the impact of the EU’s ban on Russian oil imports and around the potential of America shale output. It forecasts Russian liquids production will drop to 10.11mn b/d in 2023 from 10.96mn b/d this year, unchanged from last month’s MOMR.
The forecast call on its own members’ crude is also largely unchanged, at 28.6mn b/d for 2022 and 29.2mn b/d for 2023.
