OPEC continued to raise its oil production in November under the OPEC+ deal, but the cartel continued to pump less crude than its share of the monthly increase, the monthly Reuters survey found on Tuesday.
Under the OPEC+ deal, the ten OPEC members bound by the OPEC+ pact should be raising their combined production by 254,000 barrels per day (bpd) each month out of the total OPEC+ monthly supply addition of 400,000 bpd.
In November, OPEC’s crude oil production increased by 220,000 bpd to 27.74 million bpd, according to the Reuters survey.
The rise, once again, fell short of the 254,000-bpd increase that OPEC should be implementing.
The Reuters survey confirms a trend that began a few months ago—not all OPEC members have the capacity to pump to their full quotas.
Estimates from secondary sources in OPEC’s latest Monthly Oil Market Report (MOMR) with data for October continued to show what analysts, tanker-tracking firms, and previous OPEC monthly reports showed: the cartel has been undershooting its collective production quota—mostly because of a lack of capacity at some members to pump crude to their respective quotas.
Due to the lower-than-target production, OPEC’s compliance with the cuts jumped to 120 percent in November, up from 118 percent in October, the Reuters survey showed. Related: Oil Prices Bounce Back After ‘Black Friday’ Collapse
Saudi Arabia, OPEC’s top producer and de facto leader, saw the largest increase in production in November, in line with its target. So did Iraq, OPEC’s second-largest producer, according to the survey.
Nigerian production managed to recover in November from a force majeure in October, but other African producers continued to struggle to produce to their targets. Oil production in Angola, Gabon, and Equatorial Guinea either fell or remained flat. The steepest drop came from Angola, whose output dropped by 50,000 bpd in November from October due to a lack of capacity, the Reuters survey found. Angola’s exports have dipped to a record low this month, per tanker schedules seen by Reuters.
OPEC+ meets on Thursday to decide production levels for January, and a growing number of analysts believe that the group could pause the monthly supply additions amid an expected surplus early next year and the still high uncertainty about the impact of the Omicron Covid variant on oil demand.
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By Tsvetana Paraskova for Oilprice.com
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