Report by Reuters has shown that contrary to speculations that the cut agreement by members of the Organization of the Petroleum Exporting Countries (OPEC) late last year to cut quotas in order to cause price jump is working.
Members had agreed to cut its output by about 1.20 million bpd from Jan. 1 – the first such deal since 2008 – to prop up oil prices and get rid of a supply glut.
Compared with the levels that the countries agreed to make the reductions from, in most cases their October output, this means the OPEC members have cut output by 958,000 bpd of the pledged 1.164 million bpd, equating to 82 percent compliance.
Supply from the 11 OPEC members with production targets under the deal in January has averaged 30.01 million bpd, according to the survey based on shipping data and information from industry sources, down from 31.17 million bpd in December.
The Reuters survey is based on shipping data provided by external sources, Thomson Reuters flows data, and information provided by sources at oil companies, OPEC and consulting firms. It would be recalled that Nigeria and few other OPEC members were exempted from the cut due to some levels of natural cuts they had been experiencing.
Nigeria’s total quota had been 2.4mbpd, but militancy has reduced the output for some years, a times coming down to as low as 1.4mbpd.
