OPEC’s crude oil production has increased by 160,000 barrels per day (bpd) in January as the OPEC+ alliance is easing the output cuts in the first month of 2021, the monthly Reuters survey found on Friday.
OPEC’s production is estimated to average 25.75 million bpd in January, up by 160,000 bpd from December, and the seventh month in a row in which the cartel has boosted its production, according to the survey of OPEC sources, sources at oil firms, and tanker-tracking data.
While most of the previous monthly gains in production were attributed to recovering output in Libya, which is exempted from the OPEC+ cuts, and poor compliance of some OPEC members in the pact, the January increase in production is not surprising, considering that OPEC+ decided in December to add 500,000 bpd in January to production. The alliance is easing the cuts from 7.7 million bpd in December to 7.2 million bpd in January.
Of the 500,000-bpd quota for the whole group, OPEC’s share of increased production is around 300,000 bpd.
Therefore, the biggest increases in January came from OPEC’s number one and number two producers, Saudi Arabia and Iraq, respectively, as their share of quotas is higher, the Reuters survey found.
The third-biggest gain in OPEC production in January has come from Iran, which, like Libya, is exempted from the OPEC+ cuts. Related: Can Big Oil Surprise This Earnings Season?
Iran said earlier this month that it had started ramping up its crude oil production eyeing a return to pre-sanction levels in a month or two.
The recovering production in Libya, however, has seen disruptions this month, and is producing slightly less in January compared to December, the Reuters survey found. A leak that forced the shutdown of an oil pipeline reduced Libyan oil production by as much as 200,000 bpd for a week, while the Petroleum Facilities Guard briefly shut down the Hariga oil port in eastern Libya after the National Oil Corporation delayed the payment of salaries for its members.
Nigeria has seen the largest drop in production in January, the survey found, following a month-long force majeure on exports of its largest export crude Qua Iboe. Exxon lifted the force majeure last week.
By Tsvetana Paraskova for Oilprice.com
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There is a very real danger the US Federal Reserve will start trying to reign in inflationary pressures in the US economy but for now interest rates still remain at record all time lows and ahem "recovery" ahem has therefore been left to be solved by fiscal measures (Keynesianism.) Coal prices remain at record lows in the USA as the USA continues to move towards natural gas run combined cycle electricity generation with wind, hydropower and nuclear power as well as legacy coal used as base load power.
So far no flood of propane from Canada into the USA but certainly as with expectations of a flood of oil from Canada into the USA so too one must include a flood of distillate fuels from there to here as a result as well.