OPEC+ compliance level drops to 94pct
By Sara Israfilbayova
The OPEC/non-OPEC Joint Technical Committee (JTC) has reported a drop in compliance levels with the November oil output cut deal.
The JTC estimated that the compliance level of OPEC and participating non-OPEC countries has dropped from 98 percent in June to 94 percent in July, Bloomberg reported.
The 14-member Cartel has agreed to cut output by about 1.2 million bpd until March 2018 in an effort to reduce inventories and support prices. Other producers, including Russia, Kazakhstan and Azerbaijan, pledged to cut another 600,000 bpd.
Compliance with the deal has been high so far but OPEC production hit a 2017 peak in July, in part on increased output from Libya and Nigeria, which were exempted from the pact due to production-sapping unrest.
Earlier, Saudi suggested that it would export 6.6 mbpd in August, down from 7.1 mbpd in July. Iraq has also hinted about better compliance.
World oil prices jumped up on August 22 despite the low compliance of OPEC and some non-OPEC countries with the oil output cut agreement.
The price for October futures of Brent oil has increased by 0.75 percent to $52.05 per barrel as of 07:24 (UTC + 4). The price for September futures of West Texas Intermediate (WTI) grew by 0.70 percent and stood at $47.70 per barrel.
Currently, the OPEC/non-OPEC Joint Technical Committee has convened in Vienna to monitor the compliance levels and discuss further steps.
Meanwhile, Kuwait's oil minister Essam al-Marzouq told Kuwait TV on August 21 that OPEC plans to discuss at a meeting in November whether to extend or end production cuts.
"At our next meeting in late November...the most important items will concern the fate of the agreement to extend or terminate the production cut," said Marzouq.
He said oil inventories in recent weeks fell more than expected and that one-week forecasts were two million barrels a day, down from 6.5 million.
The Ministerial Monitoring Committee and the Technical Committee of OPEC + experts were established to monitor compliance with the agreement and make recommendations on how to adjust its conditions. The committees include representatives of Saudi Arabia, Venezuela, Kuwait, Algeria, Oman and Russia.
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