USOI - OPEC Update May 2023
2023-05-20 06:49:00 ET
Summary
- OPEC crude output was revised lower in February 2023 by 10 kb/d compared to last month’s report, and March 2023 OPEC crude output was revised lower by 3 kb/d.
- World All Liquids Supply fell to 101.3 Mb/d in April 2023, a decrease of 0.5 Mb/d from last month.
- OPEC crude output increased by 3.2 Mb/d over the past 23 months to 28.6 Mb/d in April 2023.
- OECD stocks fell in March 2023 by 31.7 Mb to 34 Mb, below the 5-year average.
- OPEC expects Permian output to grow by 590 kb/d from 2022 to 2023.
A guest post by D Coyne
The OPEC Monthly Oil Market Report (MOMR) for May 2023 was published recently. The last month reported in most of the OPEC charts that follow is April 2023 and output reported for OPEC nations is crude oil output in thousands of barrels per day (kb/d). In many of the OPEC charts that follow, the blue line with markers is monthly output and the thin red line is the centered twelve-month average (CTMA) output.
Figure 1 Figure 2
OPEC crude output was revised lower in February 2023 by 10 kb/d compared to last month’s report, and March 2023 OPEC crude output was revised lower by 3 kb/d. When the World was at its centered twelve-month average peak for C+C output in August 2018, OPEC crude output was 31237 kb/d (as shown in Figure 1), in April 2023 OPEC crude output was 2634 kb/d below that level.
In the chart below, we have Russian C + C and OPEC crude oil output. The centered 12-month average (CTMA) of output for OPEC13 crude and Russian C+C was 42443 kb/d in August 2018 when World C+C output was at its centered 12-month average peak. Output for Russian C+C and OPEC crude was 3200 kb/d below the August 2018 CTMA at 39233 kb/d in April 2023 and the most recent CTMA was 39642 kb/d which is 2791 kb/d below the Aug 2018 level. In the past 12 months OPEC and Russian output has increased by 508 kb/d from 38725 kb/d in April 2022.
Figure 3 Figure 4
World All Liquids Supply fell to 101.3 Mb/d in April 2023, a decrease of 0.5 Mb/d from last month. OPEC crude output increased by 3.2 Mb/d over the past 23 months to 28.6 Mb/d in April 2023.
Figure 9
OECD stocks fell in March 2023 by 31.7 Mb to 34 Mb below the 5-year average. Through March 2023 the World oil market looks fairly balanced with supply matching demand fairly closely if OPEC estimates are correct.
Figure 6 Figure 7
Based on OPEC estimates for supply and demand in Figure 6 and 7, it looks like OPEC will be able to meet supply for the remainder of 2023, economic headwinds may lead to over-supply and a fall in oil prices, especially if the US defaults on its debt.
Figure 8
OPEC expects Permian output to grow by 590 kb/d from 2022 to 2023 (annual average output change), my estimate for Permian annual average output in 2023 is similar to the OPEC estimate (5320 kb/d vs 5330 kb/d for OPEC estimate), but I expect no increase from other tight oil plays in the US in 2023, so my overall estimate for tight oil output in 2023 is 100 kb/d less than the OPEC estimate (8470 kb/d vs OPEC’s 8570 kb/d estimate for US tight oil average annual output in 2023).
Figure 9
Figure 9 above compares the EIA estimate of OPEC 13 crude output from the Short Term Energy Outlook with the estimate in OPEC’s MOMR using secondary sources from January 2018 to March 2023, EIA data after March 2023 is a forecast of future OPEC crude oil output. The annual average for the EIA estimate for 2022 OPEC crude output was 28670 kb/d and the forecast for 2023 is annual average output of 28341 kb/d (329 kb/d less than 2022). In 2024 the EIA estimates annual average OPEC 13 crude output will increase by 645 kb/d from the 2023 level to 28986 kb/d. Note also that the MOMR estimate for the call on OPEC in 2023 is 29260 kb/d, 919 kb/d higher than the EIA’s forecast for OPEC crude output in 2023.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
For further details see:
OPEC Update, May 2023