Cut compliance at 115%
OPEC has released this month’s Monthly Oil Market Report, outlining the cartel’s assessment of the state of the international oil industry.
Production from the cartel fell in November, as countries reaffirmed their commitment to output cuts. Total OPEC production fell by 133.5 MBOPD to 32,448 MBOPD in November, a significant decrease. According to Bloomberg, OPEC compliance is at 115%, the highest seen so far.
Angola, Saudi Arabia, UAE, Venezuela cut production
Angola experienced the largest production decrease in November, with output falling by 108.7 MBOPD. The country failed to reach its production cut target for the first time last month, so this decrease brings Angola back into line. According to Bloomberg, in fact, Angolan production fell beyond its target, representing 190% cut compliance.
Major production decreases were also seen in Saudi Arabia, UAE and Venezuela, which cut a combined 122.5 MBOPD. The decrease in Saudi output nearly reverses the country’s production jump last month, when it added 53 MBOPD. Production from UAE dropped by 35.5 MBOPD, the largest single-month drop since April.
The Venezuelan decline in oil production is continuing, as the country produced 1,834 MBOPD in November, 41.6 less than it did in October. Operations are getting more difficult in the South American producer, as the country grapples with default. Venezuela announced its intention to restructure its debt in November, sparking what will likely be a tremendously complicated process.
The country was able to cut a deal with Russia for $3.15 billion in debt in mid-November, but has made little progress on its $140 billion in bonds and foreign loans. China recently sued Venezuela for failing to pay its bills, suggesting one of the country’s main allies may be running out of patience.
Nigeria only major increase
The largest increase in production came in Nigeria, which added 95.8 MBOPD. The country reversed the decline seen last month, giving it total production of 1,790 MBOPD. Statements made during OPEC’s November meeting suggested Libya and Nigeria, previously exempt from the output cut, would join in curbing production. This did not prove to be the case, though, and both countries are currently looking to boost oil output.
Source: OPEC
