OPEC Update, February 17, 2023
Summary
- OPEC crude output was revised lower in December 2022 by 45 kb/d compared to last month’s report and November 2022 OPEC crude output was revised lower by 16 kb/d.
- OPEC output has increased by 797 kb/d since January 2022, from 28079 kb/d to 28876 kb/d in January 2023.
- When the World was at its centered twelve-month average peak for C+C output in August 2018, OPEC crude output was 31237 kb/d, January 2023 OPEC crude output was 2361 kb/d below that level.
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A guest post by D Coyne
The OPEC Monthly Oil Market Report (MOMR) for February 2023 was published recently. The last month reported in most of the OPEC charts that follow is January 2023 and output reported for OPEC nations is crude oil output in thousands of barrels per day (kb/d).
In most of the OPEC charts that follow the blue line is monthly output and the red line is the centered twelve-month average (CTMA) output.
OPEC crude output was revised lower in December 2022 by 45 kb/d compared to last month’s report and November 2022 OPEC crude output was revised lower by 16 kb/d.
OPEC output has increased by 797 kb/d since January 2022, from 28079 kb/d to 28876 kb/d in January 2023. When the World was at its centered twelve-month average peak for C+C output in August 2018, OPEC crude output was 31237 kb/d (as shown on the chart), January 2023 OPEC crude output was 2361 kb/d below that level.
In the chart below, we have Russian C + C and OPEC crude oil output. The centered 12-month average (CTMA) of output for OPEC 13 crude and Russian C+C was 42443 kb/d in August 2018 when World C+C output was at its centered 12 month average peak, output for Russia and OPEC was 2735 kb/d below the August 2018 CTMA at 39698 kb/d in January 2023. In the past 12 months, OPEC and Russian output has increased by 617 kb/d from 39081 kb/d in January 2022.
Based on OPEC estimates, World Oil Supply (all liquids) was 101.7 Mb/d in January 2023 10.8 Mb/d higher than output in February 2021, OPEC crude oil output increased by 4 Mb/d over the same 23-month period.
OPEC expects demand for OPEC crude to be 29.42 Mb/d on average in 2023, this is similar to OPEC crude output of 29.41 Mb/d for 2022Q3. If the OPEC estimate is correct, then oil prices may be fairly subdued in 2023, perhaps remaining in the $80 to $90/bo range for Brent crude ($75 to $85/bo for WTI).
OECD oil stocks remain near the low point since 2009Q1 at around 86 days of forward consumption. Based on OPEC estimates of World supply and demand the 2022 year-end level of World stocks is higher than year-end 2018 by about 398 million barrels.
This would be about 4 days of forward consumption higher World stock levels than year-end 2018 for year-end 2022. This is the reason that OPEC has cut output since the third quarter of 2022.
OPEC estimates that US tight oil output will increase by about 750 kb/d in 2023 (when we compare average annual 2022 output with average annual 2023 tight oil output. Most of the increase (620 kb/d) will come from increased Permian basin output.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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