OPEC production drops in December

While OPEC remains dysfunctional and without any official ceiling, production hasn't popped up as many would expect. Lower oil price, which is now hovering around $29/barrel or less is probably keeping production in check.

According to latest monthly report from OPEC, production has dropped by 0.2 million barrels/day in December to 32.2 million barrels/day and that is thanks to production drop in Nigeria, Saudi Arabia, Iraq and Kuwait. Production in Nigeria, dropped by 77,000 barrels/day, 58,000bareels/day in Saudi Arabia, 31,000 barrels/day in Iraq and 23,000 barrels/day in Kuwait.

In 2015, OPEC produced 31.85 million barrels/day, while demand for the groups' crude stand at 29.9 million barrels/day. OPEC surplus stands at 2 million barrels/day.

In response to lower price and drop in production in North America, OPEC now expects non-OPEC crude production to decline by 660,000 barrels/day this year and demand for OPEC crude to go up and reach 31.65 million barrels/day.

Brent is up more than 2% today, trading at $29.3/barrel and at 30 cents discount to WTI.