OPEC oil production sank to a 28-month low last month, according to a recent survey by Bloomberg:
Output by the 12-member Organization of Petroleum Exporting Countries decreased 33,000 barrels to an average 29.955 million barrels a day this month from 29.988 million in November, the survey of oil companies, producers and analysts showed.Production slipped to the lowest level since July 2011 as ministers decided to keep their output target unchanged at 30 million barrels a day on Dec. 4 in Vienna.
Sluggish production can be attributed to a number of problems in a number of OPEC’s member states. Venezuela’s highly politicized (and, relatedly, mismanaged) national oil company saw production slip, while the afterparty in Libya has been a headache for the country’s oil ambitions as armed protestors continue to disrupt the country’s most important export. Nigerian production recovered slightly after hitting a four-year low in August, but sabotage and brazen theft still threaten its supply.That’s not to say that OPEC is on any sort of precipitous decline—Saudi output remains strong, contributing nearly a third of the bloc’s supply, while Iran is itching to kickstart its own oil production that has been crippled recently by Western sanctions. Between its 12 member states, OPEC will find a way to at least come close to its production targets; oil is too important to its members’ national budgets not to.But North America’s new oil presence is softening the impact of OPEC supply disruptions. In that, we’re already seeing what will be one of the shale boom’s most important geopolitical consequences. Shale may not make the US energy independent, but it can help even out price shocks in the oil market, and that’s good news.