OPEC oil production increased in December, when Angola set January 1st as the date to leave the organization and, at the same time as Nigeria and Iraq, increased exports, providing the market with an offer that offset the effect of the cuts. from Saudi Arabia and OPEC+ allies to support the market.
A survey published last week disclosing this information indicates that the Organization of Petroleum Exporting Countries produced 27.88 million barrels per day (bpd) last month, an increase of 70 thousand bpd compared to November, although it down by more than one million bpd compared to the same month in 2022.
The boost comes ahead of new OPEC+ cuts in 2024 and Angola’s exit from OPEC, which is expected to reduce production and market share in January, which coincides with the reduction in the bloc’s market share, which has been declining due to restricted production and the departure of some members.
In December, the biggest increases of 60,000 bpd came from Iraq and Angola, which boosted exports, the research concluded.
Nigeria also sent more oil abroad without yet having started production of petroleum products at its new refinery, owned by businessman Dangote.
The agency cites two sources as declaring Angola’s increase to be a one-off and probably not sustainable until January, while Iraq still has a considerable amount of production offline due to the ongoing interruption of oil exports to the North through Turkey.
Saudi Arabia has reduced production to slightly below nine million bpd, the research concluded, as a result of extending a voluntary one million bpd production cut to provide extra support to the market.
Iran reduced exports in December, the survey found, with production falling slightly from the five-year high reached in November.
That country recorded one of OPEC’s largest production increases in 2023, despite United States sanctions still being in force.
OPEC production remains below the desired amount by almost 600 thousand bpd, largely because Angola and Nigeria do not have the capacity to pump at current desired levels.
Angola’s departure from the group and a new Nigerian quota for 2024 should bring actual production closer to the target level.
The Reuters research, which aims to track supply to the market, is based on shipping data provided by external sources, flows data from Refinitiv Eikon, information from companies that verify flows such as Petro-Logistics and Kpler, and information provided by company sources oil companies, OPEC and consultants.
Crude on the rise in the London market
Brent futures rose $1.17, or 1.51 percent, to $78.76 a barrel yesterday, while U.S. West Texas Intermediate crude futures rose $1.62, or 2 .26 percent to $73.82.
The WTI rate accumulated gains of more than two dollars yesterday, when the US Secretary of State, Antony Blinken, was preparing to visit the Middle East in an attempt to contain growing regional tensions, as the Israel-Hamas conflict intensifies.
Both Brent and WTI were expected to end the first week of the year higher, recovering from losses on Thursday triggered by sharp rises in US derivative stocks.
The price recovery serves as “a warning of the risk rooted in the growing tension in the Middle East,” said Tamas Varga, an analyst at PVM, in a note cited by Reuters.
Expectations were dampened by a report from the US Government indicating that employment grew in December, which could limit the easing of interest rates this year, and a note from a major bank on oil stocks.
US employers hired more workers than expected in December while raising wages at a solid pace, prompting financial markets to scale back expectations that the Federal Reserve would begin cutting interest rates in March.
