According to the recent September prepared by the Organization of the Petroleum Exporting Countries regarding the latest developments in the crude oil market for August, the OPEC oil production increased during August compared with July’s oil production levels.
OPEC’s crude oil production increased to 31,410 thousand bbl/d in August compared with 31,156 thousand bbl/d in July. This means the total OPEC oil supply slightly rose by 253.9 thousand during last month. Libya’s oil production slightly rose by 23.3 thousand bbl/d to 1,440 thousand bbl/d. The current production levels are still 10% below Libya’s average oil production of 1,600 thousand bbl/d in 2010. Saudi Arabia’s oil production remained nearly unchanged at 9,855 thousand bbl/d. Iran’s oil production also remained nearly unchanged as it reached 2,767 thousand mark – its lowest production level in recent years. On the other hand Angola’s production rose by 193.6 thousand bbl/d; Nigeria’s oil production also slightly rose by 49.1 thousand bbl/d.
The rest of OPEC countries also nearly didn’t change their oil quotas during August 2012.
The oil supply of non-OPEC countries was revised down to an estimate of 53.15 million bbl/d in 2012, an increase of 0.71 million bbl/d compared with 2011’s oil supply. The estimated growth in non-OPEC oil supply in 2013 is 54.09million 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 eight months of 2012 at 31.3 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 90.12 million bbl/d.
The total world oil demand forecast for 2012 is estimated to reach 88.74 million bbl/d – a growth of 0.85 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 1.38 million bbl/d (i.e. a surplus of 1,380 thousand barrels).
One interpretation of these figures is: if the production will remain at its current pace, if the oil market will continue to loosen up, then the prices of crude oil will not further rise.
Nonetheless keep in mind, if OPEC were to cut its oil production (mainly Iran) to the 30 million bbl/d agreed upon quota, this is likely tightened the oil market and pressure up oil prices. Up to now, however, there is little evidence that OPEC is heading towards this direction.
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