The organisation of the petroleum exporting countries (OPEC) petroleum production to grow to almost 2.7 million barrels per day (bpd) in 2022, a forecast that could result in the largest year-over-year increase in OPEC production since 2004, the Energy Information Administration (EIA) has revealed.
The EIA stated in its January Short-Term Energy Outlook (STEO) that the increase in crude oil production forecast is largely based on its interpretation of the January 2022 OPEC+ meeting, where participants reaffirmed their decision to continue increasing output by 0.4 million bpd each month until all production cuts are reversed.
“OPEC’s surplus crude oil production capacity increased to nearly 9 million b/d in mid-2020 as the onset of the COVID-19 pandemic greatly reduced demand, causing producers to lower output.
“OPEC’s surplus capacity has fallen since then and most recently averaged 4.6 million b/d in December 2021. We forecast OPEC crude oil production will increase by 2.5 million b/d to an average of 28.8 million b/d in 2022,” the EIA said.
Recall that Nigeria, Africa’s top oil producer, has witnessed a decline in its crude oil production by 43000 barrels per day (bpd) to 1.34 million barrels per day (bpd), according to the secondary sources of the oil cartel’s January report.
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Also, according to secondary sources, the 13-member oil cartel said its total crude production averaged 27.88 million bpd in December, higher by 170,000 bpd month-on-month.
While the monthly report indicated that its crude oil output increased mainly as a result of increase in crude oil production in Angola, Saudi Arabia, Iraq and the UAE, it also showed that production in Libya and Nigeria declined at this period.
However, the STEO projected that the recent production disruptions in Libya will be more than offset by production increases from other OPEC members.
The report also indicated that “As a result of this disruption in Libya, it estimated that unplanned outages in OPEC countries increased to 2.2 million b/d in December 2021.
“Our forecast assumes that the sanctions that are constraining petroleum exports from Iran and Venezuela will remain in place through the end of 2023,” it added.
Meanwhile, despite the recent increase in unforeseen outages, EIA believes that OPEC countries still have greater surplus production capacity than they did previously.
