Oil production from OPEC nations dipped in November, as a sharp drop in Iranian supplies offset a surge in Saudi output to all-time highs.
The group’s latest monthly report comes just days after the 15-member organization reached a deal with 10 exporter nations, including Russia, to remove 1.2 million barrels per day from the market. OPEC alone will slash output by 800,000 bpd.
The decision follows a plunge in oil prices since the start of October, in part due to projections that the oil market will be oversupplied next year. Slowing economic growth and financial strain in key oil-consuming nations are also raising concerns about energy demand in 2019.
“After a healthy start to the year, the world economy in 2018 was marked by a rising divergence in growth trends,” OPEC warned in a statement.
“Rising trade tensions, monetary tightening and geopolitical challenges are among the issues that skew economic risks even further to the downside in 2019.”
In November, OPEC’s output slipped by about 11,000 bpd to 32.965 million bpd, according to independent sources that OPEC cites in its monthly report.
Saudi Arabia pumped just over 11 million bpd, with monthly production jumping by 377,000 bpd. Figures provided directly by the Saudis indicate the kingdom pumped at nearly 11.1 million bpd.
That is set to plunge over the next two months. Saudi Energy Minister Khalid al-Falih said he expects output to drop to about 10.2 million bpd in January.
The November increase from Saudi Arabia was wiped out by a 380,000 bpd plunge in Iran’s output, as the nation grapples with U.S. sanctions that snapped back into place on Nov. 5. Last month, Iranian production dipped below 3 million bpd for the first time since January 2016, when international sanctions on the country over its nuclear program were lifted during the Obama administration.
The United Arab Emirates and Kuwait also raised output last month, but those increases were offset by declines in Iraq, Gabon, Libya, Nigeria and Venezuela. The remaining OPEC members held production roughly steady.
OPEC left its forecast for growth in oil demand in 2019 unchanged at 1.29 million bpd, after lowering it every month in its last four reports. In 2018, OPEC forecasts that the world’s appetite for oil grew by 1.5 million bpd.
The group knocked down its forecast for non-OPEC production growth in 2019 by about 80,000 bpd. That is mostly due to mandatory output cuts in Alberta, Canada, and new supply caps adopted as part of OPEC’s deals with 10 nonmember nations.
Still, OPEC forecasts oil supplies from non-OPEC countries to increase by 2.16 million bpd next year, driven by rising output in the United States, Brazil, Russia and the United Kingdom. In 2018, output from these countries grew by 2.5 million bpd, OPEC estimates.
With the rise in supplies outstripping the increase in demand, OPEC expects to pump 31.4 million bpd next year, about 1 million bpd less than in 2018.