OPEC is considering deepening its output cuts to stave off a market slump in the months ahead, but its November crude oil production shows that it is already significantly overcomplying with its committed quotas. OPEC as a whole pumped 29.65 million b/d last month, according to the latest S&P Global Platts survey of the group’s production.
The 11 members with quotas, including kingpin Saudi Arabia, produced 25.66 million b/d, a 1.18 million b/d cut from their October 2018 levels. That is a compliance rate of 145% — 368,000 b/d more than the 812,000 b/d in output reductions that OPEC had agreed to under a supply accord with Russia and nine other non-OPEC allies, who had committed to shoulder 383,000 b/d in cuts.
The data indicates that if a proposal to increase the OPEC+ coalition increases its total cuts by an additional 400,000 b/d, as Iraq has proposed, OPEC would be already most of the way there on its own, if the group kept its production steady. The coalition meets Thursday and Friday in Vienna to discuss the future of the agreement, which expires in March. Not all members appear on board with deepening the cuts, with many preferring an extension at the same quotas.
Saudi Arabia, which had self-reported production of 10.30 million b/d in October as it replenished its inventories after September’s attacks on its key oil facilities, pumped 9.90 million b/d in November, according to the Platts survey. That is 431,000 b/d below its quota under the deal.
The kingdom has in most months produced well under its cap to lead the coalition by example. Shares in state-owned Saudi Aramco are set to begin trading next week on the domestic stock exchange, also providing motivation to keep oil prices stable.
Saudi Arabia has pressured Iraq and Nigeria, the two most noncompliant members of the bloc, to bring their production down in line with their quotas, and the Platts survey showed that both countries made progress.
Iraq, which pumped 4.64 million b/d in November, down 130,000 b/d month on month, drew heavily on its crude inventories to keep exports robust while shutting in production at some fields. But it remains above its quota of 4.51 million b/d. Nigeria reduced its output to 1.87 million b/d, still 100,000 b/d above its quota of 1.77 million b/d.