• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 17 mins Shale Oil will it self destruct?
  • 18 hours Berkeley becomes first U.S. city to ban natural gas in new homes
  • 9 hours Today in Energy
  • 31 mins Iran Captures British Tanker sailing through Straits of Hormuz
  • 4 hours Drone For Drone = War: What is next in the U.S. - Iran the Gulf Episode
  • 5 hours Oil Rises After Iran Says It Seized Foreign Tanker In Gulf
  • 1 day Mnuchin Says No Change To U.S. Dollar Policy ‘As of Now’
  • 1 day Populist, But Good: Elizabeth Warren Takes Aim at Private-Equity Funds
  • 2 days Migration From Eastern Europe Raises German Population To Record High
  • 23 hours Why Natural Gas is Natural
  • 20 hours LA Solar Power/Storage Contract
  • 2 days Washington Post hit piece attacking oil, Christians and Trump
  • 2 days Excellent Choice: Germany's Von der Leyen Secures Powerful EU Executive Top Job
Alt Text

Cracks In Gasoline Demand Weigh On Oil Markets

Slowing economic growth has taken…

Alt Text

It’s Sink Or Swim For U.S. Shale

Cracks are emerging 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

Premium Content

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

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:




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play