OPEC Allies Get Back on Track with Oil cuts

Media IN Abu-Dhabi 18-05-2019:   Source OPEC/IEA

Organisation of Petroleum Exporting Countries (OPEC) and its partners are once again cutting production as promised in their effort to steady the market. In April both sides of the so called OPEC plus alliance complied with their supply pact for the first 16 months.

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 Strengthened  the organization’s compliance even as Nigeria and Iraq, OPEC’s second largest producer, raised output from March. The non-OPEC  group is seeking to cut 383,000 barrels a day, with Russia responsible for 60% of that amount.

Below is a summary of the OPEC members cut back compared to the agreed target

• Saudi Arabia cut to 891,000 compared to initial target of 322,000.
• Kuwait cut to 112,000  compared to initial target of 85,000
• Angola cut to 115,000 compared to 47,000
• UAE cut to 108,000 compare to 96,000
• Algeria cut t0 44,000 compared to 32,000
• Equatorial Guinea cut to 17,000 compared to 4,000

However some countries cutback did not reach target and these include;

• Iraq which cut to 23,000 compared to the agreed 141,000
• Equador cut to 3,000 compared to the agreed cut of 16,000

Non-OPEC Nations

• Kazakhstan cut to 240,000 compared to 40,000
• Azerbaijan cut to 113,000 compared 20,000 this was due to the field maintenance in the country and this made a huge contribution to non-OPEC producers’ collective conformity, while the OPEC continued its commitment to the curbs.
• Mexico cut to 67,000 compared to 40,000

During the month of  April, the cut back effort was supported by strong adherence from the United Arab Emirates 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

Summary of OPEC that complied

• Saudi Arabia cut back reached target of 9,742 barrels per day
• UAE cutback reached 3,060
• Kuwait cutback reached 2,697
• Angola cutback reached 1,413
• Algeria it reached 1,013

Non OPEC nations

• Nigeria cutback did not reach target of 1,819
• Ecuador cut back did not reach target of 528

 

While OPEC and its partners have cut production, U.S. output remains near  record levels, and oil prices have recently slipped amid the U.S.-China trade war. 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 plus curbs are set to expire after june.