The Organization of Petroleum Exporting Countries produced 751,000 bpd less in December than in the previous month in a rush to prop up prices, OPEC said in its latest Monthly Oil Market Report. The cartel’s total stood at 31.578 million bpd, versus 32.328 million bpd in November, according to data from secondary sources.
Oil prices, however, were slow to react to the decline, with both Brent crude and West Texas Intermediate down at the time of writing. Brent crude traded at US$60.22 a barrel, down 1.79 percent, with WTI at US$51.24 a barrel, down by 2.05 percent.
As expected, Saudi Arabia shouldered the bulk of the reduction, pumping 468,000 bpd less in December than November, at 10.553 million bpd. Libya came second from the top in terms of production decline but in its case, this was the result of a production outage at its largest field, Sharara. The North African country booked a production decline of 172,000 bpd.
Iran’s oil production declined by the third-highest margin in December, by 159,000 bpd, but once again, this was not the result of deliberate effort but of the U.S. sanctions that came into effect in early November, pressuring demand for Iranian crude despite the sanction waivers granted to eight Iranian oil importers.
Analyzing the global oil fundamentals for 2018 and 2019, OPEC’s analysts said last year global demand gad grown by 1.5 million bpd and this year it would slow down to 1.29 million bpd, to hit 100.08 million bpd at the end of the year. The increase, although more moderate than in 2018, will likely be driven by Asian consumers, with India in the lead, followed by China.
Demand for OPEC oil last year fell by 1.2 million bpd from 2017, the same amount the cartel agreed to cut, together with its non-member partners, to stabilize prices this year. However, the report authors expect demand for OPEC crude this year will be 900,000 bpd lower than last year’s, at 30.8 million bpd.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- U.S. Oil Outlook Slammed By Lower Prices
- Oil May Never Return To The Triple-Digits
- Offshore Spending To Overtake Shale In 2019