OPEC’s crude oil production
A Bloomberg survey reported that OPEC’s (Organization of the Petroleum Exporting Countries) crude oil production rose by 240,000 bpd (barrels per day) to 32.95 MMbpd (million barrels per day) in June 2016—compared to the previous month. The rise in production from Nigeria led to the rise in OPEC’s production. A Reuters survey reported that OPEC’s crude oil production rose to 32.82 MMbpd in June 2016—compared to 32.5 MMbpd in May 2016—according to data from shipping and industry sources. Reuters stated that OPEC’s production rose due to the rise in production from Nigeria despite militant attacks. A Reuters survey suggests that it’s OPEC’s highest production since 1997. However, Bloomberg surveys suggest that OPEC’s production peaked at 33 MMbpd in December 2015.
OPEC members’ production
Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the UAE (United Arab Emirates), and Venezuela are members of OPEC. According to Reuters, these countries’ crude oil production figures for May 2016 are as follows:
- Algeria’s production was flat at 1.1 MMbpd in June 2016—the same as May 2016
- Angola rose by 20,000 bpd to 1.73 MMbpd in June over May
- Iran rose by 5,000 bpd to 3.6 MMbpd in June over May
- Iraq fell by 80,000 bpd to 4.2 MMbpd in June over May
- Kuwait rose by 10,000 bpd to 2.85 MMbpd in June over May
- Nigeria rose by 150,000 bpd to 1.55 MMbpd in June over May
- Saudi Arabia rose by 50,000 bpd to 10.3 MMbpd in June over May
- UAE rose by 50,000 bpd to 2.95 MMbpd in June over May
- Venezuela fell by 50,000 bpd to 2.3 MMbpd in June over May
EIA’s crude oil production estimates
The EIA (U.S. Energy Information Administration) estimates that OPEC’s crude oil production will rise to 32.4 MMbpd in 2016—compared to 31.6 MMbpd in 2015. It will likely rise to 33.1 MMbpd in 2017. The rise in crude oil production from OPEC will have a negative impact on crude oil prices.
Impact on crude oil producers
OPEC didn’t cap its production at its meeting on June 2. The failure of the Doha meeting on April 17 also put a lid on crude oil prices. Read Hopes for Oil Producer Meeting Boosted Prices for Last 2 Months and Why Did the Doha Oil Producer Meeting Fail? to learn more.
Middle East countries’ dependency on oil export revenues for budgets and the fight to maintain market share are driving oil producers to pump more to offset lower oil prices in 2015 and early 2016. The recent surge in crude oil prices will motivate OPEC to produce more. Volatility in oil prices impacts producers’ margins like Saudi Aramco, Oman Oil Company, Warren Resources (WRES), Bill Barrett (BBG), Halcón Resources (HK), and Bonanza Creek Energy (BCEI).
In the next part of this series, we’ll take a look at Russia’s crude oil production.