The 12 members of the Organization of the Petroleum Exporting Countries pumped an average 28.07 million barrels per day (b/d) in February, as the oil producer club continued its efforts to slash oversupply and prevent oil prices falling further, according to a Platts survey of OPEC, oil industry officials and analysts just released. This is down 900,000 b/d down from January's 28.97 million b/d.
Production from the 11 members bound by quotas under a 24.845 million b/d target ceiling fell to 25.72 million b/d, a drop of 820,000 b/d from January's 26.54 million b/d but still 875,000 b/d above the OPEC-11 target of 24.845 million b/d. Iraq, which does not have a quota, is allowed to produce at will as it struggles to rebuild its oil industry.
"OPEC should have a very interesting meeting this weekend," said Platts Global Director of Oil John Kingston. "The deepening economic gloom should, in theory, support the case for a new cut. Yet the group has still not managed to reduce output to the target level, though at a compliance rate just short of 80%, it's very close." Kingston says OPEC remains concerned, even after the cuts it has made, of putting too much oil into the market, and that hesitation will certainly be present in Vienna this weekend.
Using OPEC's 29.045 million b/d baseline for the cuts -- its own estimate of September production from the OPEC-11, the survey suggests a compliance rate of 79.2%.
It was agreed at OPEC's December 17 meeting in Algeria, the group would combine two earlier output reductions totalling 2 million b/d with a new net cut of 2.2 million b/d. The resulting 4.2 million b/d was to be cut from September production estimates derived from secondary sources.
The group will meet Sunday, March 15, in Vienna to review the current agreement. Saudi-owned newspaper Al-Hayat reported Monday that Saudi Arabia, OPEC's most powerful producer, had told OPEC president Angola that it wanted better compliance with the existing cut and that a further reduction would not be needed if the group managed to remove from the market an end-January surplus of 1.5 million b/d.
Some analysts do not rule out a further cut.
Most Popular Articles
From the Career Center
Jobs that may interest you