Top exporter Saudi Arabia cut deeper than
pledged, while its close allies the United Arab Emirates and Kuwait also made
sizable reductions, Bloomberg reported.
Those deliberate curbs were compounded by
involuntary output drops in Iran, targeted by US sanctions, and Libya, both of
which were exempt from the group’s agreement.
Output from OPEC’s 14 current members fell by
930,000 bpd last month to 31.02 million bpd, according to a Bloomberg survey of
officials, analysts and ship-tracking data. OPEC’s 15th member, Qatar, left the
group at the end of December.
OPEC and its allies renewed their production
cuts accord in December after a 40% plunge in crude prices, prompted by record
American shale flows and doubts about the strength of demand.
The group, which is known as OPEC+ and includes
Russia, agreed to remove 1.2 million bpd from the market, compared to October
levels, during the first six months of 2019.
OPEC’s share of the cut is 800,000 bpd, to be
delivered by 11 members excluding Iran, Libya and Venezuela. Those 11 nations
implemented 79% of their pledged cuts in January, the survey found. That means
they would need to cut about another 170,000 bpd to fully implement the
agreement.
The OPEC+ deal defied US President Donald
Trump’s pressure to maintain oil flows and keep prices low. West Texas
Intermediate crude futures jumped more than 18% last month, the biggest January
gain on record, and traded just below $54 per barrel on Friday.
Saudi Arabia followed through on its pledge to
make a quick and early start to the agreement. It cut production by 450,000 bpd
from December to reach 10.2 million bpd, about a third deeper than required
under the terms of the deal. This is a huge reduction from record output of
11.1 million bpd in November.
🆔 Follow us on Twitter @ SouthPSEEZ