OPEC cut its crude oil production by 890,000 bpd from December to average 32.14 million bpd in January, the cartel said in its Monthly Oil Market Report on Monday, with figures suggesting that members are largely sticking to the supply-cut deal so far.
OPEC’s secondary sources figures are close to those of the International Energy Agency (IEA), which said last week that the deal achieved a record initial compliance rate of 90 percent and OPEC’s crude oil production was 32.1 million bpd in January.
As per the November 30 agreement, OPEC pledged to cut 1.2 million bpd to bring its ceiling output to 32.5 million bpd between January and June.
OPEC’s closely-watched monthly report showed today that oil production in January decreased the most in Saudi Arabia, Iraq and the UAE, while production in Nigeria, Libya and Iran increased. The cartel did not provide a compliance rate percentage, but Reuters calculations peg it at around 93 percent.
Secondary sources figures show that Saudi Arabia cut deeper than promised, and reduced output to below 10 million bpd last month, to 9.946 million bpd, down by 496,200 bpd compared to December, and more than the 486,000-bpd-cut it promised in the deal.
Kuwait and the UAE also overcomplied. Related: IEA Tracks 40 Percent Compliance Rate For Non-OPEC Deal Participants
On the other hand, OPEC’s secondary sources show that Iraq, Venezuela, Angola and Algeria cut less than promised, while production in Nigeria rose by 101,800 bpd, Libya’s output increased by 64,700 bpd, and Iran’s output rose by 50,200 bpd. Nigeria and Libya were exempt from the cut-deal while Iran was allowed by raise its production slightly, by up to 90,000 bpd.
Commenting on the crude oil price movements, OPEC said that the OPEC/non-OPEC production adjustment supported the market, “although gains were capped by increased drilling activity in the US”.
In terms of oil demand growth this year, OPEC expects “healthy” growth with potential growth estimated at 1.2 million bpd, “well above” the ten-year average of 1.0 million bpd.
By Tsvetana Paraskova for Oilprice.com
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