Saudi Arabia Oil Production (mn barrels per day, aop)

Oil prices roughly stable in February as investors remain cautious

The OPEC oil basket traded at USD 81.9 per barrel on average in February, up 0.3% from the prior month. Meanwhile, on 3 March, the latest date with data available, the price was 1.6% higher on a year-to-date basis and 20.4% lower than on the same day last year.

Crude oil prices were broadly stable in February as investors forwent risky bets. It appears that investors have not yet determined the main price drivers in the oil market in the coming months. Uncertainty remains surrounding the extent to which China’s reopening will boost crude demand and the extent to which the U.S. Fed will hike rates this year.

According to a survey by Reuters, the combined crude oil output of OPEC members rose by 0.15 million barrels per day (mbpd) from January to 28.97 mbpd in February. This mostly reflected higher output in Nigeria. Despite the increase, OPEC was still pumping 0.7 mbpd less in February than it was in September 2022. Reuters said that OPEC’s Gulf producers—Kuwait, Saudi Arabia and the United Arab Emirates—maintained high compliance with their quotas.

Looking ahead, our panelists see OPEC oil output rising by the end of this year. However, Saudi output is likely to stagnate, as it is already 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.