• 6 minutes Corporations Are Buying More Renewables Than Ever
  • 17 minutes WTI @ 67.50, charts show $62.50 next
  • 23 minutes Starvation, horror in Venezuela
  • 8 hours Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 1 day Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 1 day Renewable Energy Could "Effectively Be Free" by 2030
  • 1 day Saudi Fund Wants to Take Tesla Private?
  • 9 mins China goes against US natural gas
  • 2 days Mike Shellman's musings on "Cartoon of the Week"
  • 2 days Venezuela set to raise gasoline prices to international levels.
  • 2 days The Discount Airline Model Is Coming for Europe’s Railways
  • 2 days Pakistan: "Heart" Of Terrorism and Global Threat
  • 2 days Are Trump's steel tariffs working? Seems they are!
  • 7 hours Hey Oil Bulls - How Long Till Increasing Oil Prices and Strengthening Dollar Start Killing Demand in Developing Countries?
  • 3 days Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
  • 1 day Why hydrogen economics does not work
Alt Text

What Happens Next To China’s Crude Imports?

Crude oil flows to Chinese…

Alt Text

Oil Falls Despite Crude Inventory Draw

Oil prices fell on Wednesday…

ZeroHedge

ZeroHedge

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

More Info

Trending Discussions

OPEC’s Output Drop: Saudis Overcompensate While Compliance Slides

OPEC

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:




Back to homepage

Trending Discussions


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