The Organization of Petroleum Exporting Countries (OPEC) disclosed a surge in crude oil production for December compared to the previous month, as detailed in its latest Monthly Oil Market Report. In December, the collective output reached 26.7 million barrels per day, a rise from November’s 26.628 million barrels per day. The notable upturn was primarily attributed to heightened production in Nigeria, where output increased from 1.319 million barrels per day to 1.418 million barrels per day, as indicated by OPEC’s secondary sources. Iraq also experienced a production uptick, moving from 4.269 million barrels per day to 4.292 million barrels per day.
Conversely, several OPEC members witnessed a decline in production, with notable decreases in Saudi Arabia (-12,000 bpd), Kuwait (-23,000 bpd), Iran (-11,000 bpd), and other contributing nations.
Internally, OPEC faces challenges in ensuring compliance with production cuts among its members. However, external pressures, particularly from the United States, also impact the organization’s efforts. OPEC’s recent estimates revealed a significant rise in U.S. crude oil production, increasing by nearly 1 million barrels per day in 2023. The report indicates that U.S. production reached 12.89 million barrels per day last year, a notable uptick of 0.98 million barrels per day from the previous year. Forecasts suggest a further increase to 13.23 million barrels per day in 2024 and 13.61 million barrels per day in 2025, aligning closely with projections from the Energy Information Administration (EIA), which anticipates 2024 production at 13.21 million barrels per day.
Despite these dynamics, Chinese demand for crude oil is reportedly slowing down, according to the CEO of commodities trader Mercuria Energy Group.
Mercuria suggests that, in light of these circumstances, OPEC may need to consider additional production cuts to maintain current price levels. Brent crude oil is currently trading at $77.11 per barrel as of 1:00 pm ET, marking a decline from $79.80 per barrel at the same time last year. The fluctuating global oil landscape poses challenges for OPEC as it navigates both internal and external factors influencing the energy market.