OPEC’s crude oil production
Data compiled by Bloomberg suggest that OPEC’s (Organization of the Petroleum Exporting Countries) monthly crude oil production increased by 18,000 bpd (barrels per day) to 32.1 MMbpd (million barrels per day) in December 2015. OPEC’s current crude oil production is close to peak levels.
OPEC members’ production levels
OPEC’s kingpin, Saudi Arabia, produced 10.3 MMbpd of crude oil in December 2015. Iraq produced 4.4 MMbpd, and Iran produced 2.7 MMbpd in December 2015. All these countries are close to peak levels. Read the next part of this series to learn about OPEC and non-OPEC production estimates and how their production levels affect oil prices.
OPEC’s demand consensus
OPEC’s Monthly Oil Market Report suggests that OPEC’s oil demand was 29.7 MMbpd in 2014 and rose to 29.9 MMbpd in 2015. Its demand is estimated to rise further to 31.6 MMbpd in 2016. The global economy is expected to grow by 3.4% in 2016 as compared to 3% in 2015. This economic growth will also boost oil demand.
OPEC is producing more oil and even abandoned its collective output target of 30 MMbpd in its December 4, 2015, meeting in order to gain market share. Consequently, oil prices have fallen by 70% in the last 19 months due to record production from Russia to OPEC.
Historically low oil prices have led to a fall in revenues of oil producers like Energy XXI (EXXI), Halcón Resources (HK), and Marathon Oil (MRO). To learn more about the financial woes of US energy companies, read US Oil and Gas Companies’ Debt Exceeds $200 Billion. However, low oil prices benefit oil refiners like Western Refining (WNR), Alon USA Partners (ALDW), and Northern Tier Energy (NTI).
ETFs and ETNs like the United States Oil Fund (USO), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), the Vanguard Energy ETF (VDE), and the First Trust Energy AlphaDEX Fund (FXN) are also influenced by the roller-coaster ride in oil prices.