OPEC Output Steady as UAE Cut Offsets Gains in Troubled Members

OPEC’s crude output held steady last month as the United Arab Emirates pulled production back sharply in atonement for recent months of oversupply. The UAE slashed by 310,000 barrels a day, or roughly 10%, according to a Bloomberg survey, in order to better comply with limits set by the cartel. The organization and its allies are seeking to keep global crude markets in balance amid the convulsions caused by the coronavirus.

The Gulf sheikhdom drew a rare public rebuke from OPEC’s de facto leader, Saudi Arabia, last month for a production surge over the summer that violated its agreed quota. It’s now moved closer to that limit again, with tanker-tracking data showing exports at their lowest in 23 months.

Acts of Penance

UAE supply pullback offsets gains elsewhere

Source: Bloomberg

The Organization of Petroleum Exporting Countries and its partners — which include exporters such as Russia and Kazakhstan — are keeping supplies near the lowest level in decades to offset an unprecedented plunge in fuel demand. Their efforts are showing mixed success, with signs of inventories piling up again and oil prices stuck around $40 a barrel.

The UAE’s supply reversal underscores the urgency of the situation at the cartel’s highest levels. Tanker-tracking data show it throttled shipments back in late September, shortly after the censure from Riyadh. With the reduction, the UAE is now pumping 2.68 million barrels a day, about 90,000 above its mandated ceiling. OPEC’s total output rose by 40,000 barrels a day to average 24.43 million, according to the survey.

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