Global demand stable, Nigeria’s production drops to 972,000pd in August

World oil demand growth in 2022 remains unchanged at 3.1 mb per day, the Organisation of Petroleum Exporting Countries (OPEC) has said.

OPEC, in its Monthly Oil Market Report for September said oil demand in the OECD region is estimated to grow by 1.6 mb/d in 2022, while non-OECD growth is expected at 1.5 mb/d.

The second quarter of 2022 is revised higher amid better-than anticipated oil demand in the main OECD consuming countries, while the 3Q22 and 4Q22 have seen offsetting revisions.

“For 2023, the forecast for world oil demand growth also remained unchanged from the previous month’s assessment to 2.7 mb/d. The OECD is expected to grow by 0.6 mb/d and the non-OECD by 2.1 mb/d.

“Oil demand in 2023 is expected to be supported by a still-solid economic performance in major consuming countries, as well as potential improvements in COVID-19 restrictions and reduced geopolitical uncertainties,” OPEC said.

World oil supply

The oil cartel noted that just like in July, supply growth in non-OECD region in 2022 at 2.1 mb/d.

A downward revision in Other Eurasia and OECD Americas was offset by an upward revision in Latin America and Other Asia.

The main drivers of liquids supply growth for 2022 are expected to be the US, Canada, China, Brazil and Guyana, while the main production declines are expected in Indonesia and Norway. In 2023, the forecast for non-OPEC liquids production growth remained unchanged from last month’s assessment of 1.7 mb/d. The main drivers for 2023 growth are expected to be the US, Norway, Brazil, Canada and Guyana, whereas oil production declines are projected mainly in Russia and Azerbaijan. However, geopolitical concerns and uncertainties around the operational side as well as financial aspects of US production remain high. OPEC NGLs and non-conventional liquids are forecast to grow by 0.1 mb/d in 2022 to average 5.4 mb/d, and by 50 tb/d in 2023. In August, OPEC-13 crude oil production increased by 618 tb/d m-o-m to average 29.65 mb/d, according to available secondary sources.

Balance of supply, demand in 2022

The report further stated that demand for OPEC crude in 2022 remained unchanged from July to stand at 28.9 mb/d, which is around 0.9 mb/d higher than in 2021.

Compared with the previous assessment, both 2Q22 and 4Q22 were revised up by 1.0 mb/d, while 3Q22 was revised down by 0.2 mb/d. Meanwhile, 1Q22 remained unchanged compared with the previous month.

Compared with the same quarters in 2021, demand for OPEC crude in 1Q22 and 2Q22 is estimated to be higher by 2.6 mb/d and 1.8 mb/d, respectively, while both 3Q22 and 4Q22 are forecast to be lower by 0.6 mb/d and 0.2 mb/d, respectively. According to secondary sources, OPEC crude production averaged 28.4 mb/d in 1Q22, which is 0.3 mb/d lower than the demand for OPEC crude. In 2Q22, OPEC crude production averaged 28.6 mb/d, which is 0.2 mb/d lower than demand for OPEC crude. Demand for OPEC crude in 2023 remained unchanged from July to stand at 29.8 mb/d, which is around 0.9 mb/d higher than in 2022. Compared with the previous assessment, 2Q23 and 4Q23 were revised up by 0.2 mb/d and 0.1 mb/d respectively, while 3Q22 was revised down by 0.3 mb/d. Meanwhile, 1Q23 remained unchanged compared with the previous month. Compared with the same quarters in 2022, demand for OPEC crude in 1Q23 and 2Q22 is forecast to be 0.5 mb/d and 0.1 mb higher, respectively, while 3Q23 and 4Q23 are expected to be higher by 1.5 mb/d and 1.6 mb/d, respectively.  According to the report, sources from direct communication put Nigeria’s daily production at 972,000. Only recently, OPEC increased Nigeria’s production quota to 1.8mb/d. However, the country has been unable to meet it’s quota due to heavy oil theft and pipeline vandalism.