According to the December report prepared by the Organization of the Petroleum Exporting Countries regarding the oil market for November, the OPEC oil production rose during November compared with October 2011’s oil production levels.
OPEC’s crude oil production reached 30,367 thousand bbl/d in November compared with 29,808 thousand bbl/d in October. Libya’s oil production sharply rose again by 221 thousand bbl/d to 570 thousand bbl/d after it was nearly zero during the second and third quarter of 2011. The current production levels are still short of the average of 1.6 million bbl/d Libya had reached back in 2010.
There were also gains in Saudi Arabia’s crude oil production by 175.3 thousand bbl/d. Angola also slightly raised its oil production by 103 thousand bbl/d during November compared with October’s oil production levels. The rest of OPEC countries nearly didn’t change their oil quotas during October.
The global oil supply averaged in November at 89.12 million bbl/d, which is roughly 1.31 million bbl/d increase.
The revised oil supply of non-OPEC countries is estimated at 52.46 million bbl/d in 2011, an increase of 0.18 million bbl/d compared with 2010. This revised estimate is slightly lower than last month’s report. This estimate could change as the level of uncertainty remains high vis-à-vis the oil production level of certain non-OPEC countries due to technical and political changes.
The expected worldwide crude oil demand growth was slightly revised down in the recent report. The global oil demand is estimated to grow in 2011 by 0.86 mbbl/d to an average of 87.80 million bbl/d.
OECD countries’ total oil demand is estimated to decline by 0.59% or 0.27 mbbl/d in 2011 to 45.88 mbbl/d, compared with 46.15 mbbl/d in 2010. This projection didn’t change from last month’s report.
These findings suggest a slight change in the estimation of the future of the oil market: on the one hand the crude oil supply was revised up, while on the other hand the crude oil demand presented only a modest growth in 2011. If these findings represent the oil market well, this could mean that fundamentally, crude oil may eventually trade down in the months to come if the oil market will continue this trend. Having said that, tomorrow’s OPEC meeting might shed some light on the future of OPEC’s oil production levels in 2012 and given the rising tension between Iran and the West the oil market might change direction and start to tighten.
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