July 27, 2021

Saudi Arabia exceeded in October the level of production prior to the cut agreed by OPEC

Saudi Arabia exceeded in October the level of production prior to the cut agreed by OPEC


In particular, the Saudi oil production in October stood at 572,000 barrels per day above the level of pumping that it committed to maintain (10,058 million barrels per day), according to the monthly report prepared by the cartel on the crude market .

Likewise, Riyadh produced 86,000 more barrels per day in the tenth month of the year compared to October 2016, which is the reference period for which OPEC applied the production cut that came into effect in January 2017.

According to the secondary sources consulted by the oil cartel, which are the only ones that provide data for all countries, the United Arab Emirates was the most increased oil production, after adding 142,000 more barrels per day in October. In second place was Saudi Arabia (127,000 more barrels per day), followed by Libya (60,000 additional barrels per day).

On the contrary, the biggest decrease was registered in Iran, which reduced its pumping by 156,000 barrels per day. This came about because the Iranian-importing countries cut back their purchases to comply with sanctions on Iranian exports by the United States, which went into effect on November 5.

On the other hand, in Venezuela, the economic situation continued to constrain production, which fell by 40,000 barrels per day to a total of 1,171 million barrels. This represents the lowest figure registered by the Caribbean country since the general strike of the oil sector of 2002-2003.

COMPLIANCE OF THE COVENANT

The reduction in Iran and Venezuela, however, has allowed the cartel to continue to meet the objectives set in its pact to cut production.

Thus, excluding Congo, which entered OPEC in June 2018, and Libya and Nigeria, which are exempt from cuts due to their internal problems, the cartel's output rose to 29,712 million barrels per day, 64,000 barrels in October more than in September. Excluding those same countries, the goal of OPEC was to place pumping at 29.936 million barrels per day.

The preliminary data for September, the latest available, point to the OECD 'stock' of oil rose by 5.5 million barrels compared to the previous month, so that reserves totaled 2,858 million barrels. This figure is 25.3 million below the average of the last five years, but 287 million above the figures recorded in January 2014.

The level of reserves indicates that the OECD has oil available for 59.3 days, which is 2.1 days less than the average of the last five years.

In October, the average price of OPEC oil increased by 2.9% compared to September, reaching $ 79.39 per barrel on average. From January to October 2018, the average price stood at 71.30 dollars per barrel.

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