Global oil demand surged by 1.3 million barrels per day (bpd) to a new record high in December, with total demand at 102% above the pre-Covid levels in December 2019, data from the Joint Organizations Data Initiative (JODI) showed on Monday.
Rising consumption in Japan, Indonesia, and South Korea drove the growth in global oil demand in the last month of 2022, according to the JODI data shared by the Riyadh-based International Energy Forum (IEF). In Japan, total product demand jumped by 512,000 bpd to a 12-month high.
In November, world demand hit a nine-month high, thanks to solid demand in China, India, and Japan, the JODI data showed last month.
In December, while global demand soared, crude oil production fell to a five-month low, dragged down by lower supply from the United States and the United Kingdom, IEF said.
Markets tightened in December compared to November, but global inventories of crude oil and refined products increased counter-seasonally by 5.46 million barrels, according to the data. Yet, inventories remain 354 million barrels below the five-year average.
In other highlights in the report, Saudi Arabia’s crude oil exports increased by 157,000 bpd to 7.44 million bpd in December, while crude production dropped by 33,000 bpd to 10.44 million bpd. Crude oil inventories in the world’s top crude exporter declined by 3.05 million barrels in December, while product inventories climbed by 2.66 million barrels, the JODI data showed.
U.S. crude oil production declined by 288,000 bpd to 12.09 million bpd, while total product demand rose by 169,000 bpd to 20.76 million bpd. U.S. crude oil closing stocks fell by 6.55 million barrels to the lowest level recorded in JODI data going back to January 2002.
World natural gas demand rose in December, but natural gas inventories in the European Union and the UK dropped by 9.5 bcm in December, less than the seasonal average draw of 11.5 bcm, per JODI’s data.
By Charles Kennedy for Oilprice.com
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This was accounted for by rising consumption in Asia and global oil inventories being 354 million barrels below the five-year average.
An odd development is that although Saudi crude oil exports rose in December to 7.44 mbd, its production declined to 10.44 and its crude oil inventories also declined by 3.05 mbd at a time it is consuming 3.30 mbd. This confirms what I have been saying all along that Saudi production currently ranges from 6.5-7.0 mbd only with the balance to its production of 10.44 and exports of 7.44 made up from 3.05 mbd withdrawn from its oil inventory.
Another odd development is that while US crude oil production declined by 288,000 barrels a day (b/d) in December, the US Energy Information Administration (EIA) was claiming a US crude production of 12.4 mbd. This is at a time when US shale oil which accounts for 64% of US crude production is a spent force incapable of lifting production beyond 9.5-10.0 mbd. Moreover, US crude imports must have risen in December to 9.06 mbd at a time when the EIA was forecasting that US could become a net crude oil exporter in 2023.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert