By Nigar Abbasova
The OPEC Monthly Oil Market Report, released on February 13, showed that the cartel largely complied with the production cut agreement and fulfilled its pledges reaching a record-setting compliance.
The estimate released by the 13-member group showed that OPEC remained committed to its reduction pledges in January, the first month that the deal was in force. The monitoring group said the cartel reduced its production by 3 percent, equivalent to 90 percent compliance.
In January, OPEC production decreased by 890,000 barrels per day (bpd), according to secondary sources, to average 32.139 million bpd.
“Preliminary data indicates that world oil supply in January 2017 fell by 1.29 million bpd month-over-month to average 95.82 million bpd. The decline was due to lower OPEC and non-OPEC oil production,” the report reads.
The biggest contribution came from OPEC de-facto leader Saudi Arabia (reduction of 496,200 bpd), while the runner up is Iraq, which cut its production by 165,700 bpd. The UAE is also among the contributors with the reduction of 159,300 bpd.
However, output cuts of the giant producers were partially offset by production increases by cut-exempted Nigeria, Libya, and Iran that increased production up by 101,800 bpd, 64,700 bpd and 50,200 bpd respectively. Year-on-year, world oil supply declined by 460,000 bpd, according to the report.
OPEC also revised up its forecast for 2017 world oil demand projecting an increase by 1.19 million bpd to average 95.81 million bpd in 2017. In the previous report OPEC forecasted global oil demand to grow by 1.16 million bpd and reach 95.60 million bpd in 2017. For 2017, global oil demand growth was revised higher by around 35,000 bpd.
With demand for OPEC crude in 2017 expected to average 32.14 million bpd, the report indicated that there would be a zero average surplus should OPEC keeps output steady, while the previous report pointed to a 985,000 bpd surplus.
The cartel raised its forecast of the volume of oil that producers outside the group will pump this year, projecting supply growth of 240,000 bpd, up from 120,000 bpd previously. T
he upward adjustments are due to increased drilling activity and investment in the US, leading to higher onshore crude oil and NGLs (natural gas liquids) production.
Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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