NJ Opec cuts oil production by 1.1m barrels a day in January
The first assessment of Opecâ€™s own production since a deal to curb supplies and bolster prices came into effect shows the group has achieved around 92 per cent compliance of its 1.2m b/d target.
Opec has cut oil production by around 1.1m barrels a day as part of its promise to curb output in January, the cartel said in its monthly oil market report on Monday. The report follows a similar tally by the International Energy Agency on Friday which showed the cuts by the oil cartel in month one of the six month deal have been â€śone of the deepest in the history of Opec output cut initiativesâ€ť.
Excluding Nigeria and Libya, which were exempt in the first supply deal to cut output since the financial crisis, Opecâ€™s production in January stood at just under 29.9m barrels a day.
This is drop from the October baseline level of almost 31m b/d (this figure includes a special dispensation for Angola which was permitted by Opec to use its September figures. Total output was at 32.1m b/d, according to data from secondary sources such as consultants and analysts submitted to Opec.
These numbers are a metric through which cuts can be calculated as agreed by all the cartelâ€™s members. Saudi Arabia, Opecâ€™s de facto leader, contributed the biggest cuts to production at almost 600,000 from October levels. Russia and other countries outside of the cartel also agreed to cut around 600,000 b/d.
Although countries have enacted steep cuts, the data shows that should Opec production across all members continue at current levels it will exceed demand for the groupâ€™s crude through the first half of the year. In the last six months of this year demand for Opec crude will be greater than its production.
Saudi Arabiaâ€™s energy minister Khalid Al Falih has suggested the supply cut deal may only need to be in place for six months.