According to a survey by Reuters, OPEC production saw its largest monthly decline in two years this month. The decline is due to the cartel’s most recent supply cut agreement. Reuters photo.
OPEC production down by 890,000 b/d
A survey by Reuters shows that OPEC production is down by 890,000 barrels per day (b/d), the largest monthly decline posted by the cartel since January 2017. The decline is due to the cartel’s supply cut agreement which came into effect at the beginning of January.
The survey tracked supply to the market and shipping data and information from the new agency’s sources at oil companies were factored in to the findings. Reuters determined that OPEC production in January hit 30.98 million b/d.
Saudi Arabia along with other Gulf Allies decreased their output by more than pledged this month. As well, production cuts from OPEC countries excluded from the agreement, Libya, Iran and Venezuela, also contributed to the larger-than-expected decrease.
Libyan port closures due to poor weather along with security incidents at Sharara, the African country’s largest oilfield have impacted Libya’s crude output. Venezuela is suffering through a social and economic crisis that has seen the millions flee the country and struggling oil production continue to fall. US sanctions on Iranian crude exports have resulted in falling production for the Middle Eastern country.
According to the survey, Eleven OPEC members participating in the agreement reached 70 per cent of the pledged cuts.
In December, OPEC along with Russia and other allies, agreed to cut 1.2 million b/d from the markets for the first six months of 2019. OPEC had pledged to cut 812,000 b/d and Russia pledged to reduce its production by 230,000 b/d. Other non-cartel producers pledged to cut their output by 383,000 b/d.
Saudi Arabia’s Energy Minister Khalid al-Falih said earlier in the week that the kingdom would over deliver on its pledges for the full six months of the agreement. This month, the Saudi’s produced about 10.2 million b/d and next month are expected to see production decline to 10.1 million b/d, according to Falih.