Posted by OilVoice Press - OilVoice
OPEC's crude production averaged 32.46 million b/d in January, a rise of 60,000 b/d from December, as gains by Saudi Arabia and Nigeria more than offset Venezuela's continued slide in output, an S&P Global Platts survey showed Wednesday.
The January output figure was well below OPEC's notional ceiling of about 32.73 million b/d, when every country's quota under its production cut agreement is added up.
The cuts, which began January 2017 and are scheduled to run through the end of the year, are aimed at rebalancing the oil market by inducing draws of barrels held in storage.
Venezuela's output fell 60,000 b/d in January to 1.64 million b/d, a low not seen since its oil industry was hit by a major strike from December 2002 to February 2003, according to S&P Global Platts OPEC survey archives.
Not counting strike-affected months, Venezuela's production was last this low in June 1988, almost 30 years ago.
The country's output has fallen for six straight months, and experts say it is likely to see more declines as it suffers from crippling debt, hyperinflation, crumbling infrastructure, labor unrest, and US sanctions that restrict state oil company PDVSA's financing.
US Secretary of State Rex Tillerson said this week additional sanctions, including bans on US exports of product to Venezuela or restrictions on Venezuelan crude exports to the US, remain under consideration over the country's political and humanitarian crisis.
Angola also had a fall in output in January to 1.61 million b/d, down 30,000 b/d from December, as its crude loadings declined.
OPEC kingpin Saudi Arabia produced 9.99 million b/d in January, according to the survey, up from 9.90 million b/d in December, with exports rising in the month and more than offsetting some refinery maintenance.
Second largest producer Iraq maintained production at 4.41 million b/d in January, the survey found, as some recovery from fields in the Kurdistan region in the north balanced out a drop in exports from the southern port of Basra.
Iran, OPEC's third largest producer, pumped 3.83 million b/d in January, a slight rise from the previous month, the survey found, as the South Yaran field, which started up in late November, continued to ramp up.
Maintain High Compliance
January is the first month in which all 14 OPEC members are subject to quotas, with formerly exempt Libya and Nigeria being assigned a combined cap of 2.80 million b/d.
The two countries exceeded that limit in January, as Libyan production averaged 980,000 b/d, unchanged from December, and Nigerian output rose to 1.93 million b/d, its highest in more than two years, according to the survey.
Libyan officials have said their production levels remain vulnerable to disruption as the country struggles to rebuild following a devastating civil war, while Nigeria has disputed various calculations of its output by the independent secondary sources that OPEC uses to monitor production, including S&P Global Platts, saying they include condensate.
Besides Libya and Nigeria, the other 12 members who were given individual allocations under the production agreement maintained high collective compliance at 133% for January and 112% over the course of the deal, according to S&P Global Platts calculations.
Of the total, 10 of the members' quotas represent cuts from October 2016 output levels, while Angola's is a cut from its September 2016 figure and Iran was allowed a slight increase in production from its October 2016 level.
Venezuela, by virtue of its plunging output, has the highest compliance with its required cut at 200% since the agreement went into force.
Angola is second at 136%. Saudi Arabia, which has cut the most in terms of barrels --- an average of 571,000 b/d --- achieved 117% compliance, according to S&P Global Platts survey data.
Iraq has exceeded its target by the most --- about 73,000 b/d --- with its compliance level a mere 65%. Iraq's failure to adhere to its quota has been a sore spot among its OPEC brethren, with Saudi energy minister Khalid al-Falih calling out the country by name for its noncompliance at a meeting last month of the deal's monitoring committee, which he chairs.
The production cut agreement calls on OPEC and 10 non-OPEC partners led by Russia to collectively cut about 1.8 million b/d. The Platts OPEC figures were compiled by surveying OPEC and oil industry officials, traders and analysts, as well as reviewing proprietary shipping data.
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