Crude oil prices continued to decline in December while Omicron case numbers grew worldwide, however oil demand increased by 1.9 MMb/d. Fluctuations in short-term signposts compared to the prior month include:
- Oil prices. The emergence of the COVID-19 Omicron variant in late November has continued to weaken market sentiment and as a result, Brent crude oil prices decreased by USD6.9/bbl on average in December to USD74.2/bbl and WTI by USD7.4/bbl to USD71.7/bbl
- Global oil demand. Global liquids demand increased by 1.9 MMb/d in December to 101.1 MMb/d. For the second month in a row, Chinese demand saw the largest m-o-m increase of 0.6 MMb/d to 16 MMb/d, while Europe continued to record the largest m-o-m decrease of 0.2 MMb/d to 14 MMb/d due to a rise in COVID cases and restrictions
- Commercial inventories. Commercial inventories decreased by 50 million barrels in December to 4.3 billion barrels globally, mostly driven by a decrease in OECD inventory
- OPEC 10 production (excl. Iran, Venezuela, Libya). OPEC 10 production rose by 0.3 MMb/d m-o-m as the bloc continued to increase output. The production increase was mainly driven by United Arab Emirates, where output rose by 0.1 MMb/d m-o-m to 2.9 MMb/d. OPEC 10 output is up by 1.7 MMb/d y-o-y, however still 1.4 MMb/d down compared to pre-COVID levels on December 19
- Non-OPEC production (excl. US shale). Non-OPEC production decreased by 0.3 MMb/d m-o-m in December to 56.6 MMb/d, mostly driven by Brazil, with the largest m-o-m decrease in the group of 0.2 MMb/d to 3.2 MMb/d
- US shale oil production. US shale oil production increased by 0.1 MMb/d m-o-m to 8.3 MMb/d in December, up by 0.4 MMb/d y-o-y. Despite rising monthly output, production levels are still below pre-pandemic levels of >9 MMb/d
- Iran, Venezuela, Libya production. Iran, Venezuela, and Libya production decreased by 0.1 MMb/d m-o-m to 4.2 MMb/d, mostly driven by Libya, where production output declined by 0.1 MMb/d m-o-m, reaching its lowest level in 2021 of 1 MMb/d
- Market sentiment. Even though Omicron case numbers are increasing worldwide, oil demand increased by 1.9 MMb/d in December. Meanwhile, OPEC+ agreed to stick with its planned production increase over winter based on the indication that Omicron's impact on global demand will be relatively mild
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Oil supply & demand dashboard: December 2021
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