Joint post with Neil Mearns who made all the graphs (CV for Neil).
January was the month that OPEC was supposed to reduce production by 1.2 Mbpd and Russia + others were supposed to cut a further 0.6 Mbpd. Now that the January production data are in we can see that OPEC cut by 1.04 Mbpd and that Russia + FSU cut by 0.1 Mbpd (well within the noise of revisions) and well short of the 0.3+ Mbpd expected. But global C+C+NGLs were down 1.46 Mbpd suggesting that other countries may have intentionally or unintentionally chipped in. Brent began January on $55.05 and ended the month on $54.77. Today it is $55.56. As explained in the feeble OPEC deal the depth of proposed cuts were to shallow when compared to the scale of over-supply and stocks to make a decisive impact on the direction of the oil price.
In January, Libya produced 690,000 bpd, up 70,000 bpd on the month but well short of their target of soon reaching 1 Mbpd. But if Libya (inset map up top) does manage to keep growing production throughout this year this will continue to undermine OPEC efforts to support price.
On 24 February there were 602 oil rigs operating in the USA up from 529 on 6th January as reported last month (Figures 4, 5, 6 and 7). Rising oil drilling activity in the USA will inevitably lead to more oil production at some point. US production was 12.48 Mbpd in January down from 12.51 Mbpd in December (Figure 12). Middle East drilling remains on a cyclical high (Figure 9) while drilling remains in the doldrums everywhere else (Figures 8 and 10).
The following totals compare January 2016 with January 2017:
- World Total Liquids 96.62/96.39/ -230,000 bpd
- OPEC 32.00/31.86/-140,000 bpd
- Russia + FSU 14.19/14.43/ +240,000 bpd
- Europe OECD 3.55/3.55/ no change
- Asia 7.67/7.42/ -250,000
- North America 19.81/19.48/ -330,000 bpd
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