OPEC Update September 2024 – Peak Oil Barrel

The OPEC Monthly Oil Market Report (MOMR) for September 2024 was recently published. The last month reported in most of the following OPEC charts is August 2024, and reported production for OPEC countries is crude oil production in thousands of barrels per day (kb/d). In the OPEC charts below the blue line with markers is monthly production and the thin red line is the trailing twelve month average (CTMA) production.

June 2024 production was revised lower by 27 kb/d and July 2024 production was revised lower by 28 kb/d compared to last month’s report. OPEC 12 production fell by 197 kb/d, most of the drop from Libya’s production (219 kb/d) Iraq fell by 50 kb/d, Nigeria increased crude production by 57 kb/d, Saudi Arabia recorded a decrease of 25 kb /d.

The chart above shows the production of the 4 big OPEC producers that are subject to production quotas (Saudi Arabia, the United Arab Emirates, Iraq and Kuwait) from the post-pandemic peak in 2022, where the centered 12-month production average (CTMA) of 4 Mari reached 20849 kb/d, crude production was reduced by 2266 kb/d from the 2022 CTMA peak at 18583 kb/d. Potentially, the Big 4 could have around 2270 kb/d of spare capacity when world demand calls for increased production.

Since the pandemic, production by the four big OPEC producers has been relatively flat, with an increase until Q3 2022 and then a decline until 2024.

The other 8 OPEC (not the big 4 OPEC producers) has increased by about 400 kb/d over the past 3 years on average.

I expect future growth in US C+C production to be much lower than the recent past, and possibly even no future growth in production. World C+C production minus OPEC Big 4 and US has increased by about 860 kb/d over the past 3 years, if we subtract the OPEC Other 8 (from previous chart) increase of 400 kb/d, that leaves about 460 kb/d. kb/d growth for world minus US minus OPEC.

The chart above shows that all of the world growth in C+C production over the last 3 years has been mainly from the US and the 5 nations in the chart above. Future increases in world production will likely be from these 5 non-OPEC nations and the big four OPEC, if my assumption that US growth will be low is correct.

OECD stocks are close to 2023 levels and below the 5-year average. Brent crude oil prices remain below $75/b, which is $5/b lower than last month. The global oil market appears to be adequately supplied with oil at present.

World demand estimates for 2024 and 2025 have been revised down by 100 kb/d compared to last month, the estimates are significantly higher than EIA estimates for world demand in 2024 and 2025. Supply estimates from non-DOCs have been raised by 100 kb/d compared to last month. If world oil demand is as high as OPEC forecasts, the world may struggle to meet demand in 2025, although it seems likely that OPEC’s 2025 world liquids demand is at least 1 Mb/d too high. If I am right, then the world will have an adequate supply of oil in 2025.

OPEC’s forecast for subdued U.S. oil growth has been revised lower since last month, though it still looks a little optimistic.