As the Organisation of Petroleum Exporting Countries (OPEC), and its allies eased oil supply cuts, just as the global economy and demand began to recover from the Corona virus pandemic, a survey has discovered OPEC oil output has risen by about 1 million barrels per day (bpd) in August.
The survey by Reuters said that OPEC pumped 24.27 million bpd on average in August up 950,000 bpd from July’s figure and a further boost from the three-decade low reached in June.
The report further said that the easing of lockdowns and lower supply from OPEC, Russia and allies, known as OPEC+, have helped oil (LCOc1) climb above $46 a barrel from April’s 21-year low of below $16.
“Now we are on better ground, but a full recovery is not there yet. We must continue to monitor the market and coronavirus situation very carefully,” Reuters quoted an unnamed OPEC delegate.
OPEC+ from May 1 made a record cut of 9.7 million bpd, or 10% of global output, after the virus destroyed a third of world demand. From Aug. 1, the cut tapered to 7.7 million bpd until December, of which OPEC’s share is 4.868 million bpd.
The news agency said that in August, OPEC countries bound by the deal delivered 99% of the pledged reduction. It put compliance in July was revised up to 95%.
August’s increase is similar to that seen in July and means OPEC is now pumping almost 2 million bpd more than June’s figure, which was the lowest since 1991 based on Reuters surveys and OPEC data.
The biggest rise in supply in August came from Saudi Arabia, which pumped 9 million bpd, up 600,000 bpd from July and close to its new quota, the survey found.
The second-biggest rise came from the United Arab Emirates, which pumped more than its quota after hot weather and people holidaying at home boosted local demand.
Kuwait also raised output, remaining in line with its new target. Smaller increases came from Angola and Algeria.
Iraq and Nigeria, laggards in previous months of the OPEC+ deal, both reduced output, the survey found, with Iraq reaching its highest compliance in recent years.
The cut from Iraq, though, was less than the volume pledged and Nigeria, while boosting compliance significantly, remains short of the 100% level according to the survey.
Iranian, Venezuelan and Libyan supply was little changed. All three are exempt from voluntary cuts because of U.S. sanctions or internal issues limiting output. Libyan output may begin to rise if proposals to lift a months-long oil blockade are adopted.
The Reuters survey aims to track supply to the market and is based on shipping data provided by external sources, Refinitiv Eikon flows data, information from tanker-trackers such as Petro-Logistics and Kpler, and information provided by sources at oil companies, OPEC and consultants.
By Chibisi Ohakah, Abuja
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