Opec, allies back on track with oil cuts, US output at new high
WASHINGTON, May 18, 2019
The Organisation of Petroleum Exporting Countries (Opec) and its partners are once again cutting production as promised in their effort to steady the market, said a report.
Non-Opec compliance soared to 151% last month, compared with 61% in March, International Energy Agency data showed.
Opec adherence remained strong—also at 151%—versus 158% previously, according to Bloomberg calculations. The last time Opec and its partners jointly complied with their agreement was December 2017.
In April both sides of the so-called Opec+ alliance complied with their supply pact for the first time 16 months, reported Bloomberg.
Field maintenance in Kazakhstan made a huge contribution to non-Opec producers’ collective conformity, while the Opec continued its commitment to the curbs, it stated.
The alliance began its effort to reduce oil supplies at the start of 2017 but reset the terms of the accord as of this past January.
Opec members Libya, Iran and Venezuela have also been exempt since the beginning of the year.
Saudi Arabia has shouldered Opec’s cuts. In April that effort was supported by strong adherence from the UAE and Kuwait, among the organization’s largest producers.
Non-Opec’s mid-sized producers carried that group’s conformity, as Russia failed to fully comply, stated the report.
According to Bloomberg report, Opec is trying to cut output by 812,000 barrels a day below baseline levels. Saudi Arabia alone curbed by 891,000 daily barrels last month.
That buttressed the organisation’s compliance even as Nigeria and Iraq, Opec’s second-largest producer, raised output from March. The non-Opec group is seeking to cut 383,0000 barrels a day, with Russia responsible for 60% of that amount, it added.
Maintenance at Kazakhstan’s Kashagan field starting in mid-April slashed the nation’s output, helping the country meet its compliance goal for the second month in a row.
Azerbaijan cut by more than pledged, and Mexico continued its streak of adherence. Russia moved closer to its oil-cut target.
While Opec and its partners have cut production, US output remains near record levels, and oil prices have recently slipped amid the US-China trade war, said .
Other factors are weighing on the market: unrest in Venezuela, the return of American sanctions on Iran and recent attacks on Saudi tankers and a pipeline. For now at least, the Opec+ curbs are set to expire after June.
