According to the recent July report by the Organization of the Petroleum Exporting Countries in regards to the recent developments in the crude oil market, the OPEC oil production slightly declined during June compared with May’s oil production levels.
OPEC’s crude oil production declined to 31,363 thousand bbl/d in June compared with 31,469 thousand bbl/d in May. This means the total OPEC oil supply slightly fell by 105.9 thousand during last month. Libya’s oil production slightly rose again by 30 thousand bbl/d to 1,467 thousand bbl/d. The current production levels are still nearly 9% below Libya’s average oil production of 1,600 thousand bbl/d in early 2011 (before the fights began). Nigeria and Iraq also increased their respective oil production by small margins. Saudi Arabia’s oil production nearly didn’t change. On the other hand Iran’s oil production declined again by 188.5 thousand bbl/d and as a result if fell below the 3,000 thousand mark – its lowest production level this year.
The rest of OPEC countries nearly didn’t change their oil quotas during June 2012.
The revised oil supply of non-OPEC countries is estimated at 53.06 million bbl/d in 2012, an increase of 0.67 million bbl/d compared with 2011’s oil supply. The estimated growth in non-OPEC oil supply in 2013 is 53.98 million bbl/d.
Assuming that during 2012 OPEC’s supply will remain for the rest of the year at the same level as during the first half of 2012 at 31.31 million bbl/d and adding to that OPEC’s NGL’s and non-conventional oil at an estimate of 5.67 the total global supply will reach in 2012 an estimate of 90.11 million bbl/d.
The total world oil demand forecast for 2012 is estimated to reach 88.68 million bbl/d – a growth of 0.89 million bbl/d or roughly 1% compared with 2011’s demand.
The estimated gap between supply and demand on a global will reach during this year a total of 1.43 million bbl/d (i.e. a surplus of 1,430 thousand barrels).
One interpretation of these figures is that if the production will remain at its current levels, the prices of crude oil will not rise up again as they did during 2011 as the oil market loosens up.
Nonetheless keep in mind, if OPEC were to cut its oil production (mainly Iran) so that the oil production will reach 30 million bbl/d – the agreed upon quota, this could tighten the oil market and raise oil prices.
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