OPEC and non-OPEC oil producing countries agreed to production cuts to begin last November. So who kept their promise, who dragged their feet and who’s cheating? – PB/TK
Oil Producers Promised Output Cuts. Here’s the Reality. – By Brian Wingfield, Samuel Dodge and Hayley Warren
For more than two years, a worldwide oil glut has depressed prices, bedeviled producers and roiled the economies of some nations dependent on crude sales. On Nov. 30, OPEC sought to stop the volatility by agreeing to trim output by a collective 1.2 million barrels a day for at least the first half of the year. Eleven non-OPEC nations led by Russia and Mexico pledged to cut production by an additional 558,000 barrels a day. January output numbers provide a first look at how far the two groups have to go to reach their goal.
In January, OPEC achieved a record compliance of at least 90 percent with its planned output cuts, estimates from the producer group and the Paris-based International Energy Agency show. Three of the group’s members met or exceeded their goal and others came close. Preliminary IEA figures for the non-OPEC producers curbing production show that they’ve implemented about half of their pledged cuts. OPEC is actively trimming production, while many non-OPEC producers are largely letting their supplies decline naturally.
Not all producers are alike in terms of politics, economics and geography. Among OPEC nations, Libya, Nigeria and Iran are allowed to boost output. Russia, the largest of the non-OPEC countries, is implementing cuts gradually. The market has already rebalanced in terms of supply and demand, according to Bjornar Tonhaugen, vice president for oil markets at consultancy Rystad Energy. “This is just speeding things up, drawing down the excess,” he says.
Continue to Bloomberg.com article: https://www.bloomberg.com/graphics/2017-opec-production-targets/
