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OPEC+ Compliance With Oil Production Pact Drops To 99%

The producers part of the OPEC+ alliance complied with the oil output cuts at 99 percent in December 2020, down from 101 percent compliance in November, sources at the OPEC+ group told Reuters on Thursday.

The technical and ministerial panels of the alliance will meet in early February to discuss compliance and the state of the oil market, and the final number on OPEC+ compliance for December could slightly change before that, one of the sources in the group told Reuters.

Earlier this month, tanker tracking firm Petro-Logistics estimated that OPEC+ group’s compliance with the oil production cuts fell to 75 percent in December 2020—one of the lowest levels since the pact was enacted in May 2020.

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According to Petro-Logistics’ estimates, even the leader of OPEC and the world’s top oil exporter, Saudi Arabia, saw its compliance decline by 10 percentage points to 92 percent last month.

The ten OPEC members part of the OPEC+ pact complied at 82 percent with the production cuts in December, with compliance slipping by 10 percent month over month, Petro-Logistics said on Twitter last week. The nine non-OPEC producers in the pact had an even lower compliance rate. At 64 percent in December, their compliance had dropped by 8 percent month on month, according to the tanker-tracking firm.

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Crude production from OPEC alone, according to the cartel’s Monthly Oil Market Report published last week, averaged 25.36 million barrels per day (bpd) in December 2020, rising by 280,000 bpd compared to November.

Oil production in Libya, which is exempt from the OPEC+ cuts, increased to 1.22 million bpd, according to OPEC’s secondary sources. Libyan crude oil production jumped by 136,000 bpd in December compared to November, as the North African producer continued to surprise market analysts with its quick ramp-up of production from less than 100,000 bpd in September when the eight-month blockade on its oil export terminals was lifted. Production in Iraq increased by 76,000 bpd to 3.848 million bpd, even though OPEC’s second-largest producer has pledged time and again to cut more output to compensate for its lack of compliance in the early months of the OPEC+ deal. 

By Tsvetana Paraskova for Oilprice.com

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