The cumulative crude oil production of OPEC-13 averaged 26.69 million bbl/day in Q4 2023, marking a decrease of 254 K bbl/day compared to the previous quarter (Q3 2023), which saw an average of 26.43 million bbl/day.
Source: OPEC MOMR
In comparing the fourth quarter (Q4) of 2023 to the third quarter (Q3) of the same year in terms of secondary sources of oil production among OPEC member countries, several notable trends emerge:
- Algeria experienced a slight decrease from 962K bbl/day in Q3 to 959K bbl/day in Q4, marking a modest decline of 4K bbl/day.
- Congo saw a more significant decrease, dropping from 257K bbl/day in Q3 to 245K bbl/day in Q4, reflecting a reduction of 12K bbl/day.
- Equatorial Guinea witnessed a minor increase from 56K bbl/day in Q3 to 55K bbl/day in Q4, signaling a rise of 4K bbl/day.
- Gabon exhibited notable growth in production, increasing from 217K bbl/day in Q3 to 226K bbl/day in Q4, representing a gain of 9K bbl/day.
- IR Iran experienced an increase in production, increasing from 3 million bbl/day in Q3 to 3.14 million bbl/day in Q4.
- Iraq saw a downtick from 4.29 million bbl/day in Q3 to 4.30 million bbl/day in Q4.
- Kuwait witnessed a decrease in production, dropping from 2.56 million bbl/day in Q3 to 2.55 million bbl/day in Q4.
- Libya experienced a slight increase, declining from 1.16 million bbl/day in Q3 to 1.177 million bbl/day in Q4, marking a reduction of 20K bbl/day.
- Nigeria showed substantial growth, increasing from 1.39 million bbl/day in Q3 to 1.42 million bbl/day in Q4, indicating a significant gain of 30K bbl/day.
- Saudi Arabia saw a decrease in production, declining from 8.994 million bbl/day in Q3 to 8.972 million bbl/day in Q4, marking a reduction of 38K bbl/day.
- UAE experienced a decrease, dropping from 2.92 million bbl/day in Q3 to 2.9 million bbl/day in Q4, reflecting a decline of 19 mb/d.
- Venezuela exhibited growth, increasing from 760K bbl/day in Q3 to 786K bbl/day in Q4, marking an increase of 26K bbl/day.
Overall, while some countries saw decreases in production, others experienced notable growth, resulting in fluctuations in total OPEC production. Despite these variations, the total OPEC production remained relatively stable compared to Q3 2023.
WORLD OIL DEMAND IN Q4 2023
The fourth quarter of 2023 (Q4 2023) saw a slight decrease compared to the previous quarter (Q3 2023), settling at 24.94 million bbl/day after reaching 25.36 million bbl/day in Q3 2023. Despite this dip, the overall demand for oil in 2023 remained relatively stable, with a marginal increase of 0.19% compared to the previous year.
Breaking down the regional demand, the Americans experienced a minor decline from 25.36 million bbl/day in Q3 2023 to 24.94 million bbl/day in Q4 2023. Within the Americas, the United States also saw a decrease in demand, dropping from 20.49 million bbl/day to 20.15 million bbl/day during the same period.
Europe witnessed a slight decrease in demand from 13.62 million bbl/day in Q3 2023 to 13.39 million bbl/day in Q4 2023, while the Asia Pacific region showed a modest increase from 7.06 million bbl/day to 7.65 million bbl/day.
Looking at the broader picture, the total OECD demand experienced a slight uptick of 0.19% in Q4 2023 compared to the previous quarter. However, the non-OECD regions displayed more robust growth, with China leading the charge with a significant increase of 8.05% in demand from Q3 2023 to Q4 2023.
India, Latin America, the Middle East, and Africa also contributed to the growth in non-OECD demand, albeit to varying degrees. Comparing Q4 2023 to Q3 2023, it’s evident that while some regions experienced fluctuations in demand, the overall global oil demand remained relatively steady.
The increase in demand from non-OECD regions, particularly China, offset the slight declines seen in other regions, leading to a marginal overall increase of 2.47% in world oil demand for the year 2023.
In contrast, the third quarter of 2023 showcased a more mixed picture, with varying demand trends across different regions. Despite these fluctuations, the overall world oil demand continued its upward trajectory, reflecting a 2.46% increase compared to the same period in the previous year.
ORB vs WTI & BRENT
The OPEC Reference Basket (ORB) is a weighted average of the spot prices of 13 crudes — Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Iran), Basrah Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (United Arab Emirates), and Merey (Venezuela).
Source: OPEC MOMR
OPEC Q1 2024 OUTLOOK
In the world economy sector, development is anticipated to be stable in 2024 with a safe growth rate of at least 3.6% being foreseen showing no improvement from current appraisal data. The economies of major nations like China, the United States, the Eurozone, Japan, Brazil, and Russia are projected to grow in 2024. This will in turn boost the oil demand.
OPEC+ is currently sticking to its planned production cuts. In April 2023, OPEC agreed to cut production due to global economic slowdown concerns and the potential impact on oil demand.
The cut significantly impacted oil prices, which remained higher than before due to OPEC adhering to its production quota and the global economy showing improvement, which boosted oil demand.
This significant move to cut prices has further supported the ORB price.
Also, recent speculations have suggested continued global oil demand despite economic concerns.
How Q1 2024 will turn out cannot be exactly predicted however, some factors will affect the direction of OPEC’s price and volume movement. These factors include:
- Global economic growth: Slower economic growth can dampen oil demand, potentially leading to lower prices.
- OPEC production policy: Decisions by OPEC and its allies on production levels can significantly impact supply and prices.
- Geopolitical tensions: Disruptions in major oil-producing regions can cause price spikes.
- Inventory levels: Higher global oil inventories typically put downward pressure on prices.
- Alternative energy sources: The adoption of renewable energy sources could limit long-term oil demand growth.
