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Oil Prices Hit 7-Week Low As Trade War Heats Up

Oil Prices Hit 7-Week Low As Trade War Heats Up

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OPEC Deal Compliance Reaches 149% In February

Oil drilling

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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  • dipak sinha on March 01 2018 said:
    Opec is trying very hard to talk the price up . The have no credibility . They cheat and give fake data to reporters. Russia is cheating . Anyone believes this guys should have their head examined ,Producers in USA is producing oil in record amount and shipping LNG which displace oil . More lng more demand destruction for oil. Top this with more refined product being shipped with bites into crude . So here you go price will be half what it is in one year . Good luck
  • Johnny on March 01 2018 said:
    Nice.US production is not big enough to replace OPEC cut.5 years average achievement is just behind corner.I am sure that OPEC cut will continue beyond 2018.These countries are making considerably bigger money now and they will not jeopardize this.

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