OPEC December output rises before new cuts and Angola exit, BofA sees a volatile oil

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OPEC December output rises before new cuts and Angola exit, BofA sees a volatile oil

A study released by Reuters on Friday found that OPEC oil output went up in December. This was due to increases in production in Iraq, Angola, and Nigeria, which cancelled out cuts by Saudi Arabia and other OPEC+ members that were meant to support the market.

According to a survey that looks at a lot of shipping, flow, and production statistics, the Organisation of the Petroleum Exporting Countries pumped 27.88 million barrels per day (bpd) last month. This is up 70,000 bpd from November. More than 1 million bpd less is being made than in the same month last year.

Soon, OPEC+ will cut oil production even more in 2024, and Angola will leave OPEC. This will cause January output and market share to drop. OPEC’s market share has been going down because members are leaving and limiting output.

The biggest jumps in December, at 60,000 bpd, came from Iraq and Angola, both of which increased exports, the study found. It also sent more crude oil abroad, even though its new Dangote refinery hasn’t started making oil goods yet.

Two people in the study thought that Angola’s rise was a one-time thing that probably wouldn’t last until January. Meanwhile, a lot of production in Iraq is still not happening because its northern crude exports through Turkey are still being blocked.

The study found that Saudi Arabia cut its production just below 9 million barrels per day (bpd). This was because the world’s biggest exporter continued its voluntary cut of 1 million bpd to help the market.

The study found that Iran cut back on exports in December. Production also went down from a five-year high in November to a slightly lower level. Even though US sanctions were still in place, Iran had one of the biggest production gains in OPEC in 2023.

OPEC’s output is still about 600,000 bpd less than what was planned. This is mostly because Angola and Nigeria can’t pump at the current levels that were planned.

Actual output should get closer to the goal level now that Angola has left the group and Nigeria has been given a new quota for 2024.

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