According to its most recent monthly production data, the Organization of the Petroleum Exporting Countries (OPEC) yesterday maintained its key projections for 2023 oil supply and demand even as it raised output.
The cartel also raised concerns about the prospects for Russian oil output and the expansion of the world economy. The estimate for this year’s growth in the world oil demand is 2.22 million barrels per day (b/d).
Although the group’s most recent Monthly Oil Market Report (MOMR) acknowledges a “better performance in China’s economy on the back of its reopening from Covid-19 limitations,” it revised its prior projection for Chinese oil demand growth downward by 20,000 b/d to 510,000 b/d.
A rise from 99.55 million barrels per day in 2022 to 101.8 million barrels per day in 2023 is predicted by OPEC. However, according to the MOMR, the estimate is “subject to various risks, including global economic events, shifts in Covid-19 policy, and persistent geopolitical tensions.”
According to the MOMR, the average daily output of OPEC-13 increased by 91,000 barrels in December to 28.971 million bpd, with Nigeria accounting for almost all of the increases.
To reach 1.267 million bpd in December, Nigeria’s crude oil production increased by 91,000 bpd. Production also increased in Angola (+42,000 bpd), Iran (+9,000 bpd), Libya (+7,000 bpd), Saudi Arabia (+4,000 bpd), and Venezuela (+13,000 bpd).
As Chevron’s permission to export crude oil to the United States for use in its or other refineries was expanded, Venezuela’s production increased.
Kuwait’s production of crude oil dropped significantly by 35,000 bpd. Other countries that suffered losses included Algeria (-11,000 bpd), Congo (-18,000 bpd), Equatorial Guinea (-1,000 bpd), Gabon (-6,000 bpd), Iraq (-4,000 bpd), and the United Arab Emirates (UAE) (-9,000 bpd).
The output of Saudi Arabia decreased by 32,000 bpd to 10.435 million bpd in December 2022, according to straight reported numbers, despite an increase in production based on secondary sources to 10.478 million bpd.
Nigeria’s directly reported production growth increased by just 50,000 bpd to 1.235 million bpd, which was less than secondary source reporting. The MOMR reports that OPEC’s percentage of the world’s crude oil production “remained steady at 28.5% in December, compared to the prior month.”
Additionally, OPEC did not adjust its estimates for 2023 oil supplies. According to the forecast, non-OPEC supply will rise by 1.5 million barrels per day to 67.2 million, with the US, Norway, Canada, Kazakhstan, and Guyana contributing the majority of the growth.
It predicts a decline of 850,000 b/d in Russian oil supplies this year, which are already under pressure from western oil embargoes and the G7-led oil price ceiling.
The output of Russian liquids will then drop to 10.18 million barrels per day from 11. million barrels per day in 2022, while it was highlighted that the “projection remains susceptible to significant uncertainty.”
The Joint Ministerial Monitoring Committee of the larger OPEC+ group will convene on 1 February to evaluate market fundamentals, although the group’s ministerial meeting to debate output strategy is not scheduled until 4 June.