The 10 Organisation of the Petroleum Exporting Countries (OPEC) members are getting closer to reaching their production reduction goals, dropping output in January to an average of 32.03 million barrels per day.
According to a S&P Global Platts survey, the countries achieved 98.5 per cent of their agreed cuts in January and February production.
This comes on the back of the OPEC countries’ agreement to lower production to 32.5 million barrels per day (b/d) from January to June this year, in a bit to reduce the oil oversupply.
OPEC specialist from S&P Global Platts, Herman Wang, said it showed the OPEC members are serious about reducing their output.
“While it remains an open question whether OPEC will achieve its goal of drawing down stocks sufficiently to re-balance the market, OPEC is fulfilling its commitment, certainly in contrast to non-OPEC partners who are some ways from cutting down to their agreed levels,” he said.
Saudi Arabia had the strongest decline, lowering their output from 10.6 million b/d to an average of 9.85 million b/d in February. This is the lowest they have achieved since February 2015. The combined January and February output rate of 9.92 million b/d was also 140,000 b/d below the country’s agreed quota.
Saudi Arabia’s over compliance in reduction compensated for the overproduction of other OPEC countries including the United Arab Emirates (UAE), Iraq and Venezuela.
Iraq remained 91,000 b/d above its quota, despite lowering its February output. Venezuela remained 43,000 b/d above, and the UAE remained 42,000 b/d above its quota.
Overall, the OPEC members averaged 32.11 million b/d in January and February.
The survey also found that non-OPEC countries still remained above their production targets, with Russia reducing output by 121,300 b/d in February despite committing to a 300,000-b/d cut from October levels.
However, Russia does plan to achieved its targeted production cuts by May.