Total crude oil production of the Organization of Petroleum Exporting Countries (OPEC) dropped by 73,000 barrels per day (bpd) in December to average 26.7 million bpd, according to OPEC’s monthly oil market report released on Wednesday.
Despite the overall drop, Nigeria and Iraq saw output increases, contributing an additional 100,000 and 23,000 bpd, respectively. However, declines in Kuwait, Saudi Arabia, and Iran, which saw their production reduce by 23,000 bpd, 11,000 bpd, and 12,000 bpd, respectively, offset these gains.
OPEC’s share in global oil production rose slightly by 0.2 percentage points to 26.5% in December amid a general downturn in global oil supply.
Preliminary data revealed a decrease of 400,000 bpd in global liquids production, averaging 100.9 million bpd for December.
Non-OPEC liquids production, primarily from Russia and the US, witnessed a significant drop of 500,000 bpd, averaging 74.2 million bpd. This reduction was partially balanced by increases in Other Eurasia and Canada.
The total global rig count in December was 1,803, marking a decrease of 62 rigs from October.
OPEC countries accounted for 420 of these rigs, with a reduction of 19 rigs, while non-OPEC countries decommissioned 43 rigs.
– Global oil demand forecasts for 2024 and 2025
The OPEC group’s forecast of global oil demand growth for 2024 remains unchanged at over 2.2 million bpd from the previous month’s estimate.
This growth is anticipated to be driven by non-OECD countries contributing about 2 million bpd and OECD countries contributing around 300,000 bpd.
In the first quarter of 2024, oil demand is expected to grow by 2 million bpd year-over-year, leading to a total world oil demand of 104.4 million bpd.
Strong demand for air travel, robust road mobility—including on-road diesel and trucking—as well as healthy industrial, building, and agricultural activity—particularly in non-OECD countries—all contribute to the increase in demand.
Capacity additions and petrochemical margins in non-OECD countries, mostly in China and the Middle East, are expected to contribute to oil demand growth.
For 2025, the report forecasts robust growth of 1.8 million bpd year-over-year.
The non-OECD region is expected to contribute 1.7 million bpd and the OECD is forecast to add 100,000 bpd to this growth.
The report, however, warns of uncertainties that could impact these forecasts, including global economic trends.
-Leading demand growth in China
China is expected to lead global oil demand in 2024. Despite an expected easing in China’s GDP growth compared to 2023, oil demand is anticipated to be supported by sustained healthy activities in the services sector, a recovery in manufacturing activity, and more demand in the petrochemical sector.
The lifting of the ban on overseas group tours in China is expected to further boost international air travel, enhancing jet fuel demand.
The petrochemical industry’s expansion, particularly with the start of the Yulong Petrochemical Plant’s refining complex, is expected to bolster demand for naphtha and other petrochemical feedstocks.
Overall, China’s oil demand is anticipated to expand by 630,000 bpd year-over-year in 2024.
