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Overzealous crude production cuts from the United Arab Emirates caused OPEC’s monthly output to fall to a 10-month low in February, according to a survey by Reuters.
The Organization of Petroleum Exporting Countries produced 32.28 million barrels per day this month—netting a reduction of 70,000 barrels per day compared to the previous month. The February output figure amounts to the lowest since April 2017.
Compliance to the November 2016 agreement to cut output by 1.2 million barrels per day rose to 149 percent this month, jumping five points from January.
“We still feel that the job is not complete,” Emirati Energy Minister Suhail al-Mazrouei told Reuters earlier this month. “The price is one thing, rebalancing the market is something else and we need to balance the market.”
Oil prices in January topped $71 per barrel but fell to $66 on Wednesday.
The UAE recorded the largest decline in output last month, but was late in meeting the full extent of its promised cuts until after a few months of the deal’s implementation, which began in January 2016. The Gulf country currently holds the bloc’s rotating presidency.
Another big drop occurred in Libya, where the El Feel field fell victim to a protest by the facility’s guards, causing national production to drop by 30,000 barrels per day. Output had reached the 1 million bpd milestone last month.
Venezuela continued to see output fall as well, due to a lack of capital to fund necessary repairs on aging equipment. The shortage is amplified by U.S. sanctions that prevent Caracas from accessing foreign debt markets. The measures are due to expand before a critical vote in the Latin American country in April, according to a recent report by Bloomberg. Officials are reportedly weighing the effects of the proposed measures on Caracas and ordinary citizens.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…