The 10 Organization of the Petroleum Exporting Countries (OPEC)
members obligated to reduce oil output under the landmark agreement
signed late last year achieved 91% of their required cuts in January,
with their production falling 1.14 million barrels per day from October
levels, according to the latest survey of OPEC and oil industry
officials and analysts by S&P Global Platts.
Those cuts were, however, offset partly by output gains in Libya and
Nigeria, which are exempt from the accord, and Iran, which is allowed to
increase its production slightly.
“The market has taken early indications of compliance with the
OPEC/non-OPEC production agreement bullishly, and, indeed, the cuts that
OPEC made in January look strong so far. But as we are just barely into
the six-month deal, it’ll take a few more months of monitoring to know
whether the discipline that OPEC is displaying will hold,” OPEC
specialist of S&P Global Platts
Herman Wang said.
In all, OPEC’s 13 members — not including Indonesia, which suspended
its membership at the group’s last meeting — produced 32.16 million
barrels per day in January, a 690,000 barrels per day decline from
December, the S&P Global Platts survey showed.
With Indonesia, the organisation’s January production totaled 32.89
million barrels per day. Under the agreement, OPEC pledged to cut 1.2
million barrels per day from its October output levels for six months
starting from January 1 and freeze production at around 32.5 million
barrels per day, including Indonesia. Eleven non-OPEC countries led by
Russia have also agreed to cut output by 558,000 barrels per day in the
first half of 2017.
The survey shows that several OPEC countries covered by the agreement
still need to make some progress in lowering output to their
allocations, though the over compliance of Saudi Arabia, Kuwait and
Angola helps compensate. Since the deal covers an average of January to
June output, some month-to-month fluctuations are to be expected. Riyadh
has backed up the strong words of Saudi Energy Minister
Khalid al-Falih,
who played a key role in negotiating the agreement, with its January
production falling to 9.98 million barrels per day, according to the
Platts survey.
Iraq, which had sought an exemption from the deal, has the most
barrels to cut to reach its allocation, with January output at 4.48
million barrels per day, according to the survey, while its quota is
4.35 million barrels per day.
https://www.neweurope.eu/article/led-saudi-arabia-opec-output-drops-january/