Saudi Arabia Boosted Oil Supplies by 450,000 Barrels in November

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In its Monthly Oil Market Report for December, released Wednesday morning, the Organization of the Petroleum Exporting Countries (OPEC) noted that its month-over-month average price for its reference basket plunged by $14.06 (down 17.7%) to $65.33 a barrel in the month of November. Year to date, OPEC’s reference basket price is up $19.14 (37.1%) per barrel, compared to the first 11 months of 2017.

The cartel said OPEC production in November, as reported by secondary sources, dipped month over month by 11,000 barrels a day to a daily average of 32.97 million barrels. Saudi Arabia’s November production rose to 11.09 million barrels a day, a month-over-month increase of 377,000 barrels a day. Iranian production dropped by 380,000 barrels a day to around 2.95 million barrels, and Venezuelan production dropped by 52,000 barrels a day to about 1.14 million barrels.

The Saudis themselves reported total production of 11.09 million barrels a day in November, up by about 451,000 barrels a day compared to October. Under the production cuts initiated in January, Saudi Arabia’s quota was 10.058 million barrels a day. Iran reported September production of 3.76 million barrels a day and has not reported production since. Venezuela reported a rise of 31,000 barrels to a total of 1.46 million barrels a day.

Russia lowered September production by 40,000 barrels a day to 11.57 million barrels a day after posting a post-Soviet era record of 11.61 million barrels a day in October. On a year-over-year basis, OPEC now forecasts Russian production to average 11.33 million barrels a day in 2018, an increase of 16,000 barrels year over year.

OPEC now forecasts average 2018 global demand of 98.79 million barrels a day in 2018, unchanged from the previous month’s estimate. The current estimate for 2019 global demand is 100.08 million barrels a day, also unchanged from last month’s estimate.

Global demand growth for 2018 was forecast at 1.50 million barrels a day, again unchanged from the prior month’s estimate. The cartel’s projected demand growth for 2019 is now 250,000 barrels a day, unchanged since last month’s report.

The cartel estimated 2018 non-OPEC supply rose by 19,000 barrels a day in November to 60.03 million barrels a day. For 2019 non-OPEC supply is expected to dip by 2.16 million barrels a day to an average of 62.19 million barrels a day, a decrease of 8,000 barrels a day compared with last month’s estimate.

U.S. production in 2018 is now expected to rise by 2.13 million barrels a day, up by 74,000 barrels from last month’s forecast. The cartel’s estimate of total U.S. production in 2019 increased slightly to 18.24 million barrels. That reflects a U.S. supply growth rate of 1.72 million barrels a day (up 10.3%) for 2019.

2018’s estimated demand for OPEC crude was lowered to 32.4 million barrels a day, down by some 1.1 million barrels a day compared to 2017. Demand in 2019 is now estimated at 31.4 million barrels a day, down by around a million barrels a day from the 2018 level.

Crude prices are solidly higher Wednesday morning, with West Texas Intermediate for January delivery trading up about 1.8% at $52.57. Brent crude for February delivery traded up about 1.5% at $61.13. Both trade around $20 a barrel below their prices of just two months ago.

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