Collective OPEC+ oil output of 41,71 million b/d was the group's highest in 19 months, however 4,15 million b/d lower than what was pumped in April 2020 when Saudi Arabia and Russia released an oil price war.
OPEC and its allies increased crude oil production by 500.000 b/d in November, with 80% of the increase attributed to five members – Saudi Arabia, Russia, Iraq, Kazakhstan and Nigeria – according to the latest S&P Global Platts survey. . The 13 OPEC countries pumped 27,85 million b/d, up 300.000 b/d from October, while Russia and eight other partners pumped 13,86 million b/d, up 200.000 b/d, the OPEC revealed. search.
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OPEC+'s collective production of 41,71 million b/d was the group's highest in 19 months, but still 4,15 million b/d lower than what was pumped in April 2020 when Saudi Arabia and Russia launched an oil price war.
This is because some of the coalition members, such as Angola, Malaysia, Nigeria and Equatorial Guinea, are still struggling to pump as many barrels as they had promised due to natural declines and interruptions.
The 19 members with production quotas under the OPEC+ deal were 520.000 b/d short of their allocations for the month, taking membership to 112,31% from 113,21% in October, the survey found.
Saudi Arabia was once again the biggest move
Saudi Arabia was once again the biggest mover on the month, adding 100.000 b/da to an oil market still sensitive to demand uncertainties. The kingdom pumped 9,89 million b/d in November, slightly below its OPEC+ quota of 9,91 million b/d. Survey panelists said exports were broadly flat, but the world's biggest oil exporter has started to build up its oil inventories.
Despite fears about the impact of the Omicron variant on global oil demand, Saudi Aramco raised all of its official January selling prices for cargoes bound for Asia and the United States.
This was seen as a bullish move by some in the oil market and reinforced the OPEC+ alliance's decision to increase production quotas by 400.000 b/d in January, despite many analysts warning that the market could move from a deficit to surplus in 2022.
Decreasing spare capacity
As OPEC and its allies are rolling back their pandemic-induced cuts, the coalition's spare capacity is being questioned, with many of its members suffering from operational and technical problems due to mature fields.
Russia, which allowed a monthly increase of 104.000 b/d in November, only pumped 40.000 b/d more than it had produced in October.
The country's spare production capacity has shrunk significantly over the past year as many of its oil companies, such as Rosneft and Gazprom Neft, have already brought back most of their idle production.
Russian oil production averaged 10 million b/d last month, though still above its quota of 9,91 million b/d, according to the survey.
S&P Global Platts Analytics estimates Russia's sustainable oil production capacity to be around 10,5 million b/d, excluding condensate, which is exempt from OPEC+ quotas. That's 70.000 b/d below April 2020 levels and 240.000 b/d below the December 2018 all-time high.
However, major OPEC members such as Iraq, the United Arab Emirates and Kuwait, all of which still have ample spare production capacity, have seen steady increases over the past month.
The UAE and Kuwait produced 2,85 million b/d from 2,53 million b/d respectively, a monthly increase of 20.000 b/d, in line with their November allocations.
Iraq and Nigeria sharply increase crude oil exports
Meanwhile, Iraq increased output by 80.000 b/d, averaging 4,25 million b/d in November, just above its quota of 4,19 million b/d, according to the survey.
Federal exports of Iraqi crude rose sharply amid strong demand from its main customers, along with maintenance at a handful of its refineries.
Africa's biggest oil producer, Nigeria, produced 1,44 million barrels/day in November, up 70.000 barrels/day from the previous month, as the Bonny Light and Erha fields recovered.
However, it was still 210.000 b/d short of its November quota as its production continued to come under pressure from technical and operational issues.
Meanwhile, Kazakhstan, which has completed heavy maintenance at its main Kashagan and Tengiz fields, pumped 1,61 million b/d in November.
ready to get together
Oil markets have been through a transformation in recent weeks brought on by the new Omicron variant of COVID-19 and a US-led attempt to lower prices by releasing government oil stockpiles.
Dated Brent, which is used to cost more than half of the world's oil, has seen its price plummet by more than $10/b in the past two weeks. Date was valued by Platts at $75,81/b on Dec.
The alliance, which controls about half of the world's oil supply, decided to go ahead with the 400.000 b/d quota increase for January at its December 2 meeting.
But he said the meeting was still "in session" and he was ready to make immediate adjustments as the impact of the Omicron on the market became clearer.
But there is limited time for key Gulf OPEC+ members to change their January loading schedules if they need to recoup some or all of the increase. OPEC+ ministers are due to meet on January 4 to decide February volumes.
US may also delay 18 million of its planned 50 million barrels of oil sales
OPEC + is adding supply in a seasonally weak first quarter, but several bullish uncertainties persist, according to Platts Analytics.
“The US may also delay 18 million of its planned 50 million barrels of SPR sales through Q2022 1,4, as capacity constraints are now becoming apparent in Russia,” said Paul Sheldon, chief geopolitical consultant at Platts Analytics. , in a recent note. “Meanwhile, setbacks in Iranian nuclear talks could easily remove 2022 million b/d of assumed supply growth in April-December XNUMX.”
Platts numbers, which measure wellhead production, are compiled through surveys of oil industry officials, traders and analysts, as well as review of proprietary shipments, satellite and inventory data.
