While negotiating a production ceiling of 32.5 million barrels per day (MMBPD) for 2017, OPEC producers pumped a new record of 33.9 MMBPD in November – an increase of 151,000 BPD from October — the cartel said in its latest report.
Citing secondary sources, OPEC said crude output increased the most in Angola, Nigeria and Libya, while Kuwait and Saudi Arabia saw the largest declines among the group. Production in Iran and Iraq remained flat, Kallanish Energy learns.
OPEC’s data presentation is confusing and its monthly report shows disparity in its secondary sources’ production figures, and the agreed output adjusts from last month. Accuracy issues will challenge the deal’s implementation and monitoring, let alone the cartel’s historic tendency to cheat.
The group agreed to cut its total production by 1.2 MMBPD based on October’s 33.7 MMBPD production, bringing it down to 32.5 MMBPD next year. OPEC expects demand for its crude to reach 32.6 MMMBPD in 2017, indicating a slight stock draw of 100,000 BPD.
OPEC’s requirement in the first half of the year will be much lower than in the second half of the year, the group noted. “It should be remembered that the current overhang of 300 million barrels will remain as additional volume in the market, as the OPEC production adjustment alone would not be enough to clear the total overhang. This clearly emphasizes the importance of non-OPEC producers’ contribution to the production adjustment in support of market rebalancing,” it said.
A market rebalancing is now forecast for the second half of 2017, OPEC added.
OPEC production rose to a record high for the second straight month as the group’s members prepare to implement production cuts.
According to data collected by Reuters, OPEC output climbed to a record-breaking 34.19 million barrels per day in November.
That figure was up from a previous record high of 33.8 million bpd reached in October.
Russia’s reported average oil production jumped to a 30-year high of 11.21 million bpd in November, Reuters said.
News of the production surges comes just about a week after OPEC members reached a deal to trim the group’s production down to 32.5 million bpd from October levels.
The agreement will be effective starting on January 1, 2017.
