• 3 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 7 minutes Saudi and UAE pressure to get US support for Oil quotas is reportedly on..
  • 11 minutes China devalues currency to lower prices to address new tariffs. But doesn't help. Here is why. . . .
  • 15 minutes What is your current outlook as a day trader for WTI
  • 1 hour Domino Effect: Rashida Tlaib Rejects Israel's Offer For 'Humanitarian' Visit To West Bank
  • 1 hour In The Bright Of New Administration Rules: Immigrants as Economic Contributors
  • 12 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 7 mins Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 4 hours Continental Resource's Hamm (Trump Buddy) wants shale to cut production.Can't compete with peers. Stock will drop in half again.
  • 11 hours Movie Script: Epstein Guards Suspected Of Falsifying Logs
  • 1 day Will Uncle Sam Step Up and Cut Production
  • 12 hours US Petroleum Demand Strongest Since 2007
  • 1 day NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 2 days Why Oil is Falling (including conspiracy theories and other fun stuff)
  • 2 days Significant: Boeing Delays Delivery Of Ultra-Long-Range Version Of 777X
  • 27 mins Strait Of Hormuz As a Breakpoint: Germany Not Taking Part In U.S. Naval Mission
  • 52 days To be(lieve) or Not To be(lieve): U.S. Treasury Secretary Says U.S.-China Trade Deal Is 90% Done
Alt Text

Oil Prices Slide On Surprise Crude Build

Oil prices resumed their slide…

Alt Text

Will Shale Rise From The Dead?

The shale oil business is…

ZeroHedge

ZeroHedge

The leading economics blog online covering financial issues, geopolitics and trading.

More Info

Premium Content

OPEC’s Output Drop: Saudis Overcompensate While Compliance Slides

Confirming Monday leaks that OPEC production had dipped last month, the just released OPEC report for the month of September confirmed that OPEC produced 32.755mmb/d (according to secondary source data), a drop of 79,100 bpd, and the first monthly decline in 4 months. According to the underlying data, in the last month output increased in Nigeria (+138.3Kb/d), while declining in Libya, Gabon, Venezuela Saudi Arabia, and Iraq.

(Click to enlarge)

While secondary sources pegged Saudi production in August at 10.022mmb/d, a drop of 10.3kb/d from the previous month, the Saudi self-reported number was 9.951mmb/d, not a nominal difference and a drop of nearly 60kb/d from the Saudi self-reported 10.01mmb/d July number. Perhaps indicating that the Saudis are trying a little too hard to demonstrate compliance with the production cut agreement.

(Click to enlarge)

In the same report, OPEC boosted global oil demand growth in 2017 to 1.42mmbpd, an upward revision of 50kb/d from last month's estimate, predicting that the impact of Hurricane Harvey on demand will be “negligible”, with disruption offset by rebuilding activity. Demand for OPEC crude in 2017 is estimated at 32.7mmb/d, roughly 0.5mmb/d higher than the 2016 level. 2018 demand is now seen at 98.1m b/d, with growth rate revised up by ~100k b/d to 1.35m b/d. Related: Expert Commentary: Oil Market Tighter After Hurricane Harvey

At the same time, OPEC also raised estimates for the amount of crude it will need to supply next year by 400k b/d to 32.8m b/d. OPEC expects non-OPEC supply to grow by 0.78mmbpd in 2017, unchanged from the previous month due to offsets between Kazakhstan and the U.S. OPEC also cut its forecasts for growth in non-OPEC supply next year by 100k b/d amid lower expectations for Russia and Kazakhstan; total non-OPEC is projected to expand by 1m b/d to 58.8m b/d in 2018.

From the report:

Based on the current global oil supply/demand balanceOPEC crude in 2017 was revised up by 0.2 mb/d from the previous report driven mainly by the upward revision in demand. Within the quarters, the second quarter was revised up by 0.3 mb/d, while the first, third and fourth quarters were revised up each by 0.2 mb/d. As a result, OPEC crude is estimated at 32.7 mb/d, representing an increase of 0.5 mb/d from the 2016 level. The first and the second quarters increased by 0.9 mb/d and 0.3 mb/d, respectively, while the third and fourth quarters are expected to grow by 0.3 mb/d and 0.4 mb/d, respectively.

Similarly, OPEC crude in 2018 was revised up by 0.4 mb/d from the previous month. Within the quarters,
the first quarter was revised up by 0.1 mb/d, while the second, third and fourth quarters were revised up by 0.5 mb/d, 0.6 mb/d and 0.5 mb/d, respectively. OPEC crude is estimated at 32.8 mb/d, which is around 0.2 mb/d higher than the 2017 level. The first quarter is expected to increase by 0.4 mb/d, while the second and the third quarters are expected to increase by 0.1 mb/d and 0.2 mb/d, respectively. The fourth quarter is estimated to remain unchanged compared to the same quarter in 2017.

(Click to enlarge) Related: Can Putin Bring Peace To The Korean Peninsula?

Finally, the 11 OPEC members disclosed an 83 percent compliance rate with the production cuts, down from last month's 86 percent. Iraq was the least compliant on output cuts, with a self-reported August output of 4.38mmb/d, below the secondary sources print of 4.45, and above the quota of 4.35mmb/d.

Separately, earlier today a Bloomberg report said that OPEC is "said to discuss output-cut extensions longer than 3 months." In other words, we are back to the old "blast a soundbite and hope it pushes the price of oil higher" game.

By Zerohedge.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment
  • Johnny on September 12 2017 said:
    For the first time I start thinking that OPEC cut works.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play