OPEC pegs 11.2mbpd, raising it by 400,000 bpd
By Jeph Ajobaju, Chief Copy Editor
Output by the 15 members of the Organisation of Petroleum Exporting Countries and its allies of 10 non-members (OPEC+) has been raised from 10.8 million barrels per day (mbpd) to 11.2 mbpd in February, an increase of 400,000 bpd.
The cartel had taken the decision in December but the market was not sure if it would stick with or review the ceiling. It chose to retain it at its meeting on January 4.
OPEC forecasts global oil demand in 2022 to reach 100.6 million barrels per day (mbpd), surpassing pre-pandemic levels, as disclosed by Secretary General Mohammad Barkindo after a virtual meeting of the Joint Technical Committee.
He said world oil demand increased by 5.7 mbpd in 2021 and by 4.2 mbpd from December 2021, and recovery expected in the last quarter of 2021 (Q4 2021) would be felt in Q1 2022.
“In addition to closely monitoring the evolving impacts of Omicron variant, other factors to consider will be varying speed of vaccine rollouts worldwide; the uneven pace of economic growth across global regions; and continued supply chain disruptions.
“Additionally, rising inflationary pressures and potential central bank responses remain key factors that require close monitoring,” Barkindo said, per Nairametrics.
Non-OPEC supply in 2021 was expected to grow by 700,000 bpd to an average 63.7 mbpd and in 2022 projected to grow at an average 66.7 mbpd.
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Potential near-term impacts
Barkindo said OPEC continues to monitor the potential near-term impacts if some consuming countries effect plans to release an estimated 70 mbd from oil reserves.
“Looking at inventories, preliminary data shows total OECD commercial stocks fell by 16mb m-o-m in November 2021 to 2.721 billion barrels, which is 389 mb lower than the same month one year ago and 211mb below the 2015-2019 average.
“As we usher in the sixth year of collaboration, we move forward with confidence knowing that this highly effective and well-reputed framework for multilateral energy cooperation will once again prove to be the way of the future for this industry.”
OPEC announced that Haitham Al-Ghais would be its new Secretary General from August 1.
“Al-Ghais, a veteran of the Kuwait Petroleum Corporation (KPC) and Kuwait’s OPEC Governor from 2017 to June 2021, currently serves as Deputy Managing Director for International Marketing at KPC.
“He Chaired the Joint Technical Committee (JTC) of the Declaration of Cooperation (DoC) in 2017 and subsequently served as a Member of the JTC until June 2021,” OPEC said.
Nigeria’s output
The Nation reports that Nigeria has not been able to meet its production capacity of 2.3 mbpd, producing instead between 1.323 mbpd and 1.57 mbpd between July and December 2021.
Nigeria’s 2022 budget projects crude output at 1.88 mbpd, against its OPEC quota of 1.47 mbpd, which is less than its 1.66 mbpd quota last December.
OPEC+ alliance stuck with its earlier plan to raise production by 400,000 bpd each month until it unwinds all the supply curbs.
The move was widely expected by the market and oil prices were up by around 1.09 per cent just after news of the decision broke, bringing it to $80.07 pb on Tuesday.
The next meeting of OPEC+ is scheduled for February 2 when the group is expected to decide production levels for March.
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