Crude oil production by the Organisation of Petroleum Exporting Countries (OPEC) fell in March to an 11-month low as a result of declining Angolan exports, Libyan outages and a further slide in Venezuelan output, thus increasing compliance with a supply-cutting deal by the oil producers to another record.
OPEC pumped 32.19 million barrels per day last month, a Reuters’ survey found, down 90,000 bpd from February.
According to the survey, the March total is the lowest since April 2017.
Under a pact that started in January 2017 and runs until the end of 2018, OPEC is reducing output by about 1.2 million bpd as part of a deal with Russia and other non-OPEC producers to get rid of excess supply.
Compliance by producers to the deal rose to 159 per cent of agreed cuts from 154 per cent in February, and there was no sign that other producers had boosted output to cash in on higher prices or to compensate for the Venezuelan decline.
Oil has topped $71 a barrel this year for the first time since 2014, and was trading above $67 yesterday.
But OPEC said supply restraints should be maintained to ensure the end of a glut that had built up since 2014.
In March, the biggest decrease in supply caused by natural declines at some oilfields, came from Angola, which exported 48 cargoes, two fewer than in the same month of 2017.
Production in Libya, which remains unstable due to unrest, slipped because of stoppages at two fields, El Feel and El Sharara, setting back 2018’s partial recovery in output.
Reuters also reported that production fell further in Venezuela, where the oil industry is starved of funds because of an economic crisis. Output dropped to 1.56 million bpd in March, the survey found, a new long-term low.
Output in OPEC’s largest producer, Saudi Arabia, dropped by 40,000 bpd from February’s revised level, even further below the kingdom’s target.
OPEC’s No. 2 producer, Iraq, pumped more, as exports from the south, the outlet for most of the country’s crude, rose despite maintenance at a loading terminal. Among others with higher output, the biggest rise came from the United Arab Emirates, where production had dropped in February due to maintenance. Even so, the UAE is still pumping below its OPEC target and showing higher compliance than in 2017.
Output climbed in Qatar, after a dip in February that sources attributed to maintenance.
Nigeria also reportedly pumped at a higher level, extending a run of more stable supply from Africa’s top exporter.
Nigeria and Libya were originally exempt from cutting supply because their output had been curbed by conflict and unrest. For 2018, both told OPEC that output would not exceed 2017 levels.
OPEC has an implied production target for 2018 of 32.73 million bpd, based on cutbacks detailed in late 2016 and taking into account changes of membership since, plus Nigeria and Libya’s expectations of 2018 output.