The OPEC+ coalition saw its compliance rate with the oil production cuts at 95 percent in July, four sources from the group told Reuters on Monday, which is a level similar to the previous month, if the additional one-month voluntary cuts from Saudi Arabia, the UAE, and Kuwait for June are excluded.
The 95-percent compliance rate for July has yet to be ratified by the Joint Technical Committee (JTC) of the OPEC+ group, which is meeting later on Monday.
The volatile oil market and the highly uncertain trajectory of global demand recovery has forced the OPEC+ group to have the JTC and Joint Ministerial Monitoring Committee (JMMC) hold meetings every month until the end of 2020, instead of ahead of every full OPEC+ meeting only.
The JTC and the JMMC are meeting this week, but they will not be discussing any revisions of the ongoing production cut pact and are not expected to make any major decisions to tweak the deal, Russia’s Energy Minister Alexander Novak said last week.
At last month’s panel meetings in mid-July, the JMMC noted an improved compliance rate with the cuts. The overall compliance rate for the OPEC+ group was a record-breaking 107 percent in June, but it was due to the additional voluntary contributions from Saudi Arabia, the United Arab Emirates, and Kuwait, which cut a total of 1 million bpd in June on top of their shares of the cuts. Without those three voluntary outperformers, the OPEC+ group’s compliance was 95 percent in June, which still was the highest since the cuts started in January 2017.
In July, OPEC’s production rose by 980,000 bpd month over month to average 23.17 million bpd, the cartel said last week. Of note in the group’s July production is OPEC’s secondary sources estimate that oil production in Iraq – the biggest laggard in compliance which has promised to cut much more to offset poor compliance – saw its production rise by 39,000 bpd to average 3.752 million bpd.
The leader of the non-OPEC group in OPEC+, Russia, said earlier this month that its oil output in July was in line with its OPEC+ commitment.
By Tsvetana Paraskova for Oilprice.com
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