More facts have continued to emerge from the recent meeting of the Organisation of Petroleum Exporting Countries (OPEC), in Vienna where new oil supply oil cuts were adopted.
Business Hilights recalls that the cartel and 10 allies led by Russia agreed on Friday to a six-month, 1.2 million barrels per day production cut from October production levels, starting January 2019, with OPEC shouldering 800,000 bpd of that.
However, there are fears that full compliance from OPEC would still leave the bloc some 500,000 bpd above expected demand for its crude for the first quarter of 2019 and 400,000 bpd above the call for the second quarter, OPEC’s analysis arm said on Wednesday in its closely watched Monthly Oil Market Report.
The deal, however, exempted sanctions-hit Iran and economically distressed Venezuela, whose production is expected to decline significantly in the months ahead. That could help bring down the projected oversupply.
Libya, whose production levels have been erratic due to internal instability, was also exempted from the cuts.
Also, Nigeria is to reduce its quota with about 40,000bpd which analysts say may weaken the revenue basket that will drive 2019 national budget.
OPEC’s 15 members pumped 32.98 million bpd in October, according to an average of the six independent secondary sources used by the group to monitor output.
The forecast call on OPEC crude for Q1 2019 is 31.67 million bpd, rising to 31.77 million bpd in Q2, OPEC said in its report.
The figures all include Qatar, which has announced it is withdrawing from the organization from January. Qatar pumped 610,000 bpd in October.
The OPEC/non-OPEC coalition has scheduled its next meeting for April to review market conditions and decide on next steps.
