Saudi Arabia: Saudi crude output remained soft in December; Brent prices decline
Brent crude oil prices averaged USD 77.54 per barrel in December, down 5.7% from November’s price. On 29 December, the commodity traded at USD 77.69 per barrel, 3.7% lower than on the same day of the previous month. Prices have remained muted in January, dented by soft global demand and strong non-OPEC+ supply.
Turning to production, Saudi oil output fell marginally to 8.96 mbpd (million barrels per day) in December from November’s 8.97 mbpd, remaining at one of the lowest levels in the past decade.
After falling 8.6% last year, Saudi crude output is projected to stagnate in 2024. Before, our panelists had projected an expansion, but the Kingdom’s recent commitment to prolonging its unilateral 1.0 mbpd cut until the end of Q1 2024 has dimmed expectations of growth. This is separate from OPEC+ production curbs in place since June 2023 that are due to last until the end of 2024. An extension of the unilateral cut beyond Q1 poses a downside risk to oil production for the year as a whole.