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OPEC oil production in January was 32.1 million barrels per day and the cuts achieved a record initial compliance rate of 90 percent. the International Energy Agency (IEA) said in its February Oil Market Report.
Some producers. notably Saudi Arabia. appeared to cut the oil output by more than originally agreed amount. according to the report.
“OPEC nevertheless appears to have made a solid start to what is a six-month process. This first cut is certainly one of the deepest in the history of OPEC output cut initiatives.” said IEA.
The continued existence of high stocks. plus caution from the markets in assessing the level of output cuts and how other producers might grow production. explains why Brent crude oil prices have remained at the mid-$50s/bbl level since mid-December after receiving a post-output deal boost of close to $10/bbl. according to the report.
The oil market is very much in a wait-and-see mode. IEA analysts believe.
“In 2017. assuming normal weather conditions we expect demand to grow by 1.4 million barrels per day. an increase of 0.1 million barrels per day from the last report.” said the analysts.
During a meeting in Vienna. Austria. on Nov. 30. 2016. OPEC members decided to implement a new production target of 32.5 million barrels per day. Later. non-OPEC countries agreed to cut the output by 558.000 barrels per day during the meeting held Dec. 10. 2016.
Eleven non-OPEC countries – Azerbaijan. Bahrain. Brunei. Equatorial Guinea. Kazakhstan. Malaysia. Mexico. Oman. Russia. Sudan. and South Sudan – agreed to reduce the oil output.
OPEC and non-OPEC countries pledged to start implementing the deal from Jan. 1. 2017 for six months. extendable for another six months.
