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Ecuador has temporarily shelved its idea to ask from OPEC later this month to be exempt from its share of the production cuts, because the cartel’s supply restrictions are successfully propping up oil prices, Ecuador’s Oil Minister Carlos Perez said on Thursday.
“For now we are not going to submit the request. We’ll analyze along with OPEC’s members which alternatives they can offer. For sustaining prices, we have to support OPEC’s measures, which are so far succeeding,” Perez said in a press conference, as carried by Reuters.
Ecuador started voicing its intentions to abandon the OPEC deal just six months into the production cuts, claiming that it needs the oil revenues to offset some of its fiscal burden.
The country has pledged to cut 26,000 bpd as part of the deal, so its actual contribution to the cuts is not terribly significant, but its rebel position six months into the production restriction agreement had analysts worried that the pact was starting to fall apart.
Ecuador pumps around 530,000 bpd of oil and is OPEC’s third-smallest producer after Equatorial Guinea and Gabon. Ecuador’s oil production was 541,000 bpd in October—7,100 bpd higher than in September, according to OPEC’s secondary sources.
In August, Minister Perez said that that his country was planning to cap its crude oil production at 541,000 bpd so as to not undermine the cartel’s cuts too much.
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Last month, Perez said that Ecuador would ask OPEC in November for an exemption from the cuts, because lower oil prices had caused fiscal problems. Ecuador was looking to get the support of Saudi Arabia and Venezuela for its request, Perez said in October.
Now the Andean nation says it won’t be seeking exemption, so it either didn’t get the necessary Saudi support, or is happy with the recent rally in oil prices.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.