OPEC’s Oil Production Slightly Decreased in October

According to the recent November report published by the Organization of the Petroleum Exporting Countries regarding the recent developments in the crude oil market for October, the OPEC oil production slightly decreased again during October compared with September’s oil production levels.

OPEC’s crude oil production declined to 30,946 thousand bbl/d in October compared with 31,013 thousand bbl/d in September. This means the total OPEC oil supply slightly declined by 66.9 thousand during last month. Angola’s oil production slightly rose by 108 thousand bbl/d to 1,778 thousand bbl/d. The current production levels of Libya are still nearly 5% below Libya’s average oil production of 1,600 thousand bbl/d in 2010. Saudi Arabia’s oil production remained nearly unchanged at 9,695 thousand bbl/d.  Iran’s oil production declined by 46.8 thousand bbl/d to reach 2,626 thousand mark, which is still its lowest production level in recent years. Nigeria’s oil production also declined by 109.6 thousand bbl/d to fall below the 2,000 mark.

The rest of OPEC countries also nearly didn’t change their oil quotas during October 2012.

The oil supply of non-OPEC countries was revised down to an estimate of 52.95 million bbl/d in 2012, a rise of 0.49 million bbl/d compared with 2011’s oil supply. The estimated growth in non-OPEC oil supply in 2013 is 53.85 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 ten months 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 89.93 million bbl/d. 

The total world oil demand forecast for 2012 is estimated to reach 88.8 million bbl/d – a growth of 0.76 million bbl/d or less than 1% compared with 2011’s demand.

The estimated gap between supply and demand on a global will reach during this year a total of 1.13 million bbl/d (i.e. a surplus of 1,140 thousand barrels). Note: this figure was higher in previous months. Therefore, if the difference between the supply and the demand with further contract it could suggest that the oil market with further tighten in the months to follow, which could pressure up the prices of oil.

Nonetheless keep in mind, if OPEC were to cut its oil production (mainly Iran) to the 30 million bbl/d agreed upon quota, this would likely tighten the oil market and pressure up oil prices.

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