OPEC’s compliance with oil curbs rises

Opec’s compliance with oil curbs rises in March as UAE joins cut’. Opec oil output is likely to fall for a third straight month in March, a Reuters survey found on Wednesday, as the UAE made progress in trimming supplies while maintenance and unrest cut production in exempt nations Nigeria and Libya. The reduction by the UAE has helped boost Opec compliance this month with its production-cutting deal to 95%, up from an initial February estimate of 94% and a record high, according to Reuters surveys. The Organisation of the Petroleum Exporting Countries pledged to reduce output by about 1.2mn bpd from January 1, the first accord on supply curbs since 2008. Non-Opec countries pledged to cut about half as much.

Opec wants to end a glut that is keeping oil below $52 a barrel, half the level of mid-2014
Opec wants to end a glut that is keeping oil below $52 a barrel, half the level of mid-2014

In comments made to Reuters, Opec secretary-general Mohammad Barkindo said the Opec and non-Opec agreement “is gradually, but steadily working its way to restore balance to the oil markets”.
“The rebalancing process is already underway,” he added. Opec wants to end a glut that is keeping oil below $52 a barrel, half the level of mid-2014. But stocks are still high despite strong Opec compliance, boosting expectations that the group will seek to prolong the agreement.
“Opec is now facing the prospect of falling short of its objective,” said Stephen Brennock of oil broker PVM.” Bulging global oil stockpiles will not draw down to the five-year average unless Opec-led cuts are extended.” Compliance of 95% is higher than Opec achieved in its last cut in 2009, Reuters surveys show. Analysts including those at the International Energy Agency have put adherence in 2017 even higher, with the IEA calling it a record. March’s biggest reduction came from the UAE, which was slower than Kuwait and Saudi Arabia to trim supply.
Output is lower this month because more cuts have been implemented and due to planned maintenance, industry sources say. After limited reductions earlier in 2017, UAE officials and industry sources have said the country would improve average compliance during the six-month duration of the supply cut.