The first assessment of Opec’s own production since a deal to curb supplies and bolster prices came into effect shows the group has achieved around 92 per cent compliance of its 1.2m b/d target.
Opec has cut oil production by around 1.1m barrels a day as part of its promise to curb output in January, the cartel said in its monthly oil market report on Monday. The report follows a similar tally by the International Energy Agency on Friday which showed the cuts by the oil cartel in month one of the six month deal have been “one of the deepest in the history of Opec output cut initiatives”.
Excluding Nigeria and Libya, which were exempt in the first supply deal to cut output since the financial crisis, Opec’s production in January stood at just under 29.9m barrels a day.
This is drop from the October baseline level of almost 31m b/d (this figure includes a special dispensation for Angola which was permitted by Opec to use its September figures. Total output was at 32.1m b/d, according to data from secondary sources such as consultants and analysts submitted to Opec.
These numbers are a metric through which cuts can be calculated as agreed by all the cartel’s members. Saudi Arabia, Opec’s de facto leader, contributed the biggest cuts to production at almost 600,000 from October levels. Russia and other countries outside of the cartel also agreed to cut around 600,000 b/d.
Although countries have enacted steep cuts, the data shows that should Opec production across all members continue at current levels it will exceed demand for the group’s crude through the first half of the year. In the last six months of this year demand for Opec crude will be greater than its production.
Saudi Arabia’s energy minister Khalid Al Falih has suggested the supply cut deal may only need to be in place for six months.