• 3 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 19 minutes Saudis Threaten Retaliation If Sanctions are Imposed
  • 17 mins WTI @ $75.75, headed for $64 - 67
  • 3 hours EU to Splash Billions on Battery Factories
  • 5 hours US top CEO's are spending their own money on the midterm elections
  • 2 hours The Dirt on Clean Electric Cars
  • 13 hours Petrol versus EV
  • 7 hours OPEC Is Struggling To Deliver On Increased Output Pledge
  • 2 hours Satellite Moons to Replace Streetlamps?!
  • 5 hours The Balkans Are Coming Apart at the Seams Again
  • 10 hours 10 Incredible Facts about U.S. LNG
  • 3 hours Uber IPO Proposals Value Company at $120 Billion
  • 18 hours E-mopeds
  • 5 hours A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 9 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 1 day These are the world’s most competitive economies: US No. 1
Alt Text

China Turns Its Back On U.S. Oil

As the ongoing trade war…

Alt Text

US Demands For More Oil Could Backfire

The State Department’s request for…

Alt Text

Oil Prices Under Pressure As U.S. Shale Supply Soars

Continued production growth in the…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Trending Discussions

OPEC’s December Cuts Are A Bullish Sign For Oil Markets

OPEC oil rig

The Organization of Petroleum Exporting Countries (OPEC) cut oil production by 221,000 barrels per day in the last month of 2016, bringing the bloc’s total output to 33.08 million bpd by the end of December, according to the group’s latest report released on Wednesday.

With domestic oil sectors just recovering from years of civil strife, Iraq and Libya upped their output to pay for the reconstruction of their countries as they regain former stability. For the month of December, Libya increased oil production from 577,000 barrels per day in November to 608,000 barrels per day, based on secondary sources.

Iraq, who has contested the use of secondary source figures, produced 4.63 million barrels per day in December, up from 4.59 million barrels per day in November. Home to the second largest oil reserves in OPEC, Iraq has obligations to supermajor international oil companies, and must contend with production from the Kurdistan Regional Government (KRG) as well. The KRG may or may not play along with the cuts.

Angola also ramped up production after experiencing a sizable dip in October, but its December figure standing over 1.7 million brings the African nation back to regular highs.

In contrast, Saudi Arabia, Nigeria and Venezuela saw the largest declines – surprisingly. As the de facto leader of OPEC, Saudi Arabia has been expected to take on the burden of 40 percent of the planned cuts. For December, Saudi Arabia produced 10.47 million barrels per day, down from 10.62 million barrels per day in November. Related: The Rebound Is Here: Megaprojects Back On The Table

Nigeria’s militant crisis has led output to decline up to 50 percent at its worst. The Niger Delta Avengers and related groups demand that profits from oil production be used to develop the areas from which the resource is extracted. Nigeria’s production for December was 1.54 million barrels per day, down from 1.66 million barrels per day in November.

Venezuela, at 2.02 million barrels per day, has had to open up its borders with neighboring Colombia – a country that has been blamed for drug crises and violence in the domestic political circle.

The Saudis are keen to show that they are listening to the market, and they are also hoping to lead by example and get other OPEC and non-OPEC members to follow suit. The Kingdom said that it is planning even deeper cuts in February, in order to increase global confidence in its upcoming IPO of Saudi Aramco.

The Saudis produce medium and heavy crude, and in order to both take the sting out of cuts in terms of revenue and simultaneously help balance the market, the Kingdom will cut production of its heavy crude, which is less profitable thanks to the spread between light and heavy crude widening significantly over the past couple of years.

Overall, OPEC production for the month of December came in at 33.08 million barrels per day compared to 33.31 million barrels per day in November.

Global oil supply dropped 0.30 million barrels per day in December, averaging 96.92 million barrels per day for the month, but increasing by 710,000 barrels per day year over year.

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News