However, if you’re pressed for time, here are some of the parts we found most interesting from the report.
This graphic from the report pretty much sums it up:
*Excerpts are quotes right from the report, and are just a small part of the entire document. Again, click here for the entire OPEC Monthly Oil Report.
Crude Oil Price Movements
The OPEC Reference Basket (ORB) ended December down 21% to its lowest value since May 2009. In the second half of 2014, the ORB lost about half its value amid an imbalance in oil market supply/demand fundamentals.
In December, the ORB dropped $16.11 to $59.46/b and its yearly value was down $9.58 to $96.29/b. Oil futures tumbled sharply by more than a hefty 20% to their lowest values in more than five-and-a-half years amid an enduring bearish market environment, particularly from the supply side that has surrounded the oil market for six months now.
The ICE Brent contract plunged $16.36 m-o-m to $63.27/b, ending 2014 at an average of $99.51/b. The Nymex WTI contract lost $16.52 to $59.29/b, while its yearly value dropped to $93/b.
The spread between ICE Brent and Nymex crude has been shrinking since mid-December, when ICE Brent’s premium stood above $5/b, as the global glut has weighed more heavily on ICE Brent than Nymex crude. For December the Brent-WTI spread averaged $3.89/b.
The Futures Market Structure of Oil Prices
Both ICE Brent and Nymex WTI feature term structures in contango, a sign of ample supply pushing prompt prices below longer-dated contracts. However, ICE Brent’s contango has been steeper than that of Nymex crude. Long-term markets have also seen steep price drops. This suggests that the market expects output growth to exceed demand recovery expectations this year.
US Crude Oil Exports
US crude exports have climbed higher, providing an outlet for additional production that would otherwise have added to the country’s stockpiles.
US crude exports soared to 487,000 b/d in November, up from 360,270 b/d in October. In July, US crude exports topped 400,000 b/d, the highest since the 1950s.
World Oil Demand
World oil demand growth for 2014 was revised up by 20 tb/d to average 0.95 mb/d, bringing total oil demand to 91.15 mb/d. The upward revision was broadly a result of better-than-expected data for OECD America and China in 4Q14.
For 2015, growth is expected to be around 1.15 mb/d, higher by 30 tb/d from the previous month’s report, reaching 92.30 mb/d as result of upward adjustments to oil demand data in OECD America and Other Asia.
World Oil Supply
Non-OPEC oil supply is estimated to have averaged 56.22 mb/d in 2014, an increase of 1.98 mb/d y-o-y, up by 0.26 mb/d over the previous report.
OECD Americas’ oil supply is estimated to average 19.85 mb/d, showing growth of 1.71 mb/d compared with last year. It is projected to increase by 1.04 mb/d in 2015 over the previous year — lower than 2013 growth but the highest among all non-OPEC regions — to average 20.89 mb/d, representing a downward revision of 0.16 mb/d from the previous month.
The US and Canada’s supply are both expected to grow in 2014, while that of Mexico is estimated to decline by 90 tb/d.
On a quarterly basis, OECD America’s oil supply in 2014 is estimated to average 19.16 mb/d, 19.79 mb/d, 20.09 mb/d and 20.35 mb/d, respectively.
US Oil Supply
US total oil supply is estimated to increase by 1.63 mb/d to average 12.86 mb/d in 2014, representing an upward revision of 0.18 mb/d from the last MOMR.
With ample transportation infrastructure and nearby demand centres, Eagle Ford producers are at an advantage relative to those at the Bakken site.
Therefore, the impact from lower prices may not be as significant as for the producers in the north.
OPEC crude oil production
According to secondary sources, total OPEC crude oil production averaged 30.20 mb/d in December, an increase of 142 tb/d over the previous month.
Crude oil output increased mostly from Iraq, while production showed the largest drop in Libya.
According to secondary sources, OPEC crude oil production, not including Iraq, stood at 26.59 mb/d in December, down by 0.14 mb/d over the previous month.
US Gasoline Demand
US gasoline demand stood at around 9.2 mb/d in December, about 50 tb/d lower than the previous month and 500 tb/d higher than the same month a year earlier.
US gasoline cracks suffered a sharp drop, pressured by the bearish environment also fueled by expectations of lower seasonal demand amid lower exports to Latin America in the coming weeks, with the end of the holiday season.
The gasoline crack spread saw a sharp loss of $7 to average $11/b in December.
US Crude Oil Imports
In December, preliminary data showed that US crude oil imports increased to average 7.52 mb/d, up by 198 tb/d from last month, but were down by 251 tb/d from the same month last year.
For the whole year, US crude imports were 361 tb/d lower.