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Saudi Arabia Commodities December 2022

Saudi Arabia: Oil prices keep falling in December as global economic outlook remains glum

The OPEC oil basket traded at USD 79.7 per barrel in December on average, down 11.2% from the prior month. Meanwhile, the price was 6.5% lower on a year-to-date basis but 7.2% higher than on the same day last year.

Crude oil prices fell over the last month largely due to continued weakness in the global economy, with the JPMorgan Global Composite PMI remaining in contractionary territory in December.

According to a survey by Reuters, the combined crude oil output of OPEC members rose to 29.0 million barrels per day (mbpd) in December from 28.9 mbpd in November. This mostly reflected higher output in Nigeria. Saudi Arabia curbed output slightly to comply with the recent cut to quotas.

Looking ahead, our panelists see OPEC oil output as rising by the end of this year. However, Saudi output is likely to stagnate, as it is already producing near its quota level. This is likely to hit real GDP growth this year, despite the boost to government coffers from the upward pressure applied to crude prices by lower oil supply.

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