Crude Oil production from the Organization of the Petroleum Exporting Countries, or OPEC, is projected to grow in 2022 despite recent unplanned oil outages in Libya, the US Energy Information Administration reported Thursday.
Recent reports show that the oil group has been unable to meet quota as some members countries, including Nigeria, outputs falter. Tight crude oil supply amidst energy crunch in major oil-consuming economies continue to drive prices upward, hitting 2014 highs during the week before crude gave up some gains.
However, the EIA forecast that OPEC crude oil and total liquid fuels production will rise by 2.7 million barrels per day in 2022 to 34.3 million barrels per day. The US energy agency noted that OPEC will still hold more spare production capacity than historical averages.
About 0.4 million barrels per day of oil production went offline in Libya in late December 2021, contributing to the increase in the Brent spot price to $89 per barrel as of January 18, from a December 2021 average of $74 a barrel.
Also, protests in Kazakhstan also likely put upward pressure on the Brent price on an increased risk of outages in the country, the EIA said.
The EIA estimates that OPEC unplanned outages rose to 2.2 million barrels per day in December 2021 as a result of the outages in Libya, exacerbating ongoing maintenance issues on ageing infrastructure.
However, the EIA’s estimate of OPEC spare capacity indicates the market’s ability to respond to potential crises reduce oil supplies.
Even with increased OPEC crude oil production, the remaining surplus production capacity is expected to be more than enough to meet additional demand even with higher than expected consumption, the agency said.
SOURCE: dmarketforces Africa
