• 3 minutes Shale Oil Fiasco
  • 7 minutes "Leaked" request by some Democrats that they were asking Nancy to coordinate censure instead of impeachment.
  • 12 minutes Trump's China Strategy: Death By a Thousand Paper Cuts
  • 16 minutes Global Debt Worries. How Will This End?
  • 22 mins DUMB IT DOWN-IMPEACHMENT
  • 2 hours Everything you think you know about economics is WRONG!
  • 2 hours POTUS Trump signs the HK Bill
  • 26 mins Greta named Time Magazine "Person of the Year"
  • 2 hours americavchina.com
  • 3 hours Forget The Hype, Aramco Shares May be Valued At Zero Next Year
  • 23 hours WTO is effectively neutered. Trump *already* won the trade war against China and WTO is helpless to intervene
  • 22 hours Democrats through impeachment process helped Trump go out of China deal conundrum. Now Trump can safely postpone deal till after November 2020 elections
  • 4 hours Winter Storms Hitting Continental US
  • 3 hours Aramco Raises $25.6B in World's Biggest IPO
  • 13 hours Can Renewable Natural Gas Compete With Diesel?
Alt Text

This Exploration Blind Spot Offers Great Promise

Increasing political unrest and insufficient…

Alt Text

Canada's Oil Crisis Isn't As Bad As It Seems

Alberta’s oil industry has faced…

Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

More Info

Premium Content

IEA Official: Don’t Expect Deeper OPEC Cuts

A senior official at the International Energy Agency on Tuesday said that OPEC is unlikely to reach any agreement that would change the current production cut deal until such a time when the market situation becomes more obvious, according to Reuters.

OPEC’s current agreement between its members and allies, known together as OPEC+, is to cut 1.2 million bpd off its combined production per day.

Iraq’s oil minister had a more bullish view earlier this week, stating that the oil cartel would consider at the upcoming meeting the possibility of cutting another 400,000 bpd.

The reasoning behind the IEA’s lack of faith in OPEC trimming more of the fat to drawn down global inventories is that OPEC has a history, it says, of being reluctant to make changes to how they’re doing things until it is clear that a change would be warranted and beneficial.

But with the current overall compliance rate to the deal at almost 150%, any additional production cut promises will likely not cost OPEC anything in practice. OPEC (147% compliance in October) and its non-OPEC allies (103% compliance in October) could indeed agree to a 1.6 million bpd quota without actually cutting anymore production—the total group’s production cuts in October was 1.59 million bpd. Related: OPEC’s Number Two Suggests Deeper Oil Output Cuts

The two heavyweights, as usual, will hold the majority of the agreement clout. Saudi Arabia is already producing more than 400,000 bpd under its quota, while Russia is not quite making its target, overproducing in October by 50,000 bpd.

But for as much as Russia likes to play hard to get over increases to the production cuts or to its duration in order to increase its negotiating position of condensates, which it feels should not be part of the quota, Russia’s oil revenue hasn’t been too shabby thanks to the production cuts, boasting oil revenues of $670 million a day in 2019, up by $170 million a day from Q4 2016, right before the OPEC+ cuts began.

Meanwhile, Saudi Arabia, who talks a big game about making sure its less compliant members step in line before anyone agrees to cut more, may not be in much of a position to hold back against additional agreements waiting for promises of better compliance.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




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