Oil production from the Organization of the Petroleum Exporting Countries (OPEC) edged up by 20,000 barrels per day (b/d) to 29.72 million b/d in December from 29.7 million b/d in November as increases from Saudi Arabia, Iran and Nigeria more than offset a drop in Iraqi volumes, a just-released Platts survey of OPEC and oil industry officials and analysts showed.
"It's Goldilocks time – not too hot, not too cold -- for the oil market," said John Kingston, global director of news for Platts, a leading global provider of energy, petrochemicals and metals information. "OPEC production, which some feared would blast through all predictions of what the group needed to produce, is hanging around a level that won't tank the market and won't let prices soar on the world's various disruptions."
Furthermore, said Kingston, "Prices are at a level which is keeping producers relatively happy, and consuming nations are able to bear these costs without significant harm to their economics. In the United States, the consumer is happy enough with these price levels, such that bigger cars are making a comeback. For both buyer and seller, everything seems just right."
Despite the small increase, collective OPEC production has now been below the group's 30 million b/d ceiling since September 2013. Last year's December and November totals mark the lowest volumes since mid-2011 when the uprising in Libya reduced the country's production to a trickle.
Saudi Arabia boosted output by 50,000 b/d to 9.8 million b/d after having cut back from levels of around 10 million b/d during the high-domestic-demand summer months to 9.75 million b/d in October and November.
Nigeria, with Bonga crude oil back in the export program after field maintenance in November, increased output by 40,000 b/d to 1.92 million b/d. Iranian output increased by 30,000 b/d to 2.75 million b/d. Ecuador and the United Arab Emirates (UAE) also boosted production, by 10,000 b/d each.
Iraqi output fell by 80,000 b/d to 3.02 million b/d, and that of Kuwait and Venezuela by 20,000 b/d each.
Libyan output was little changed between November and December, averaging just 250,000 b/d both months. Earlier this week Libyan state-owned National Oil Company (NOC) said crude production had climbed above 546,000 b/d. This was due to a gradual resumption of production from the Sharara field, which had been shut in by protests and strike action since the end of October, after protesters at the facility agreed to halt their blockade, though production has been disrupted regularly since June.
Sharara, a joint venture between NOC and Spain's Repsol, is one of Libya's major onshore oil fields and feeds the 230,000 b/d Zawiya crude export terminal, the country's s second-largest. Libya had been producing close to 1.6 million b/d before the uprising that ousted the regime of Moammar Qadhafi in 2011. Output had recovered to around 1.4 million b/d earlier this year before the blockades, strikes and protests that began in May. Analysts see little prospect of a return to pre-uprising levels in the short term.
OPEC expects demand for its crude to average 29.6 million b/d this year, an 800,000 b/d year-over-year drop. A big rise in Iranian exports could push OPEC production well beyond this level, but with the clock yet to start ticking on the six-month nuclear deal reached between Iran and six world powers in November, analysts do not expect to see any significant increase from the Islamic Republic before the second half of this year at the earliest. A full lifting of the oil and banking sanctions that have crippled Iran's economy will depend on a comprehensive agreement on the nuclear issue.