Oil: OPEC + does not reach the expected daily production quotas. Poor supply, prices up
The oil-producing group of oil producing countries OPEC + continues to significantly underperform oil production levels compared to the pact target, with February production at more than 1 million barrels per day (bpd) below the collective quota, he reported. Reuters Friday. The “Compliance rate”, which measures the underproduction with respect to the agreed quotas, was 136%.
In January, the overall compliance rate among OPEC + producers was 129%, also indicating that the pact members were unable to meet their collective quotas. The compliance rate has steadily increased over the past few months, which means that the gap between the total license plate quota and actual production continues to widen. For example, compliance in December 2021 was 122% and the compliance rate was 117% in November. So the quotas are fictitious: nobody can reach them.
For more than seven months, OPEC + has effectively added lower volumes to the market each month than the nominal monthly increase of 400,000 bpd announced at each of the OPEC + meetings since August 2021.
Major oil-consuming nations, including the United States, as well as the International Energy Agency (IEA), have been asking OPEC + for months to increase supply more rapidly to help tame the surge in oil prices. and reduce the growing gap between the group's shares and the actual supply far below the market.
African OPEC members, mostly large producers in Angola and Nigeria, failed to achieve their result due to lack of investment. Other producers also cannot increase production by much. The only ones with enough spare capacity to add significantly to OPEC + production are the OPEC heavyweights Saudi Arabia and United Arab Emirates (UAE).
Unfortunately, neither the Saudis nor the UAE have come forward to close the growing gap in the global supply of oil, which is set to become much wider following the Russian invasion of Ukraine which led to the "self-sanctioning" of buyers of Russian oil.
“ The OPEC + alliance agreed on March 2 to maintain a modest planned increase in production of 400,000 barrels per day for April, insisting on no shortage of supply. Saudi Arabia and the UAE, the only producers with significant spare capacity, so far show no willingness to tap into their reserves , ”the IEA said in its oil market report earlier this week.
So there is no immediate prospect of a drop in oil prices, even if the quotas rise, because they cannot reach the quotas they set for themselves.
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The article Oil: OPEC + does not reach the expected daily production quotas. Low offer, prices on comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/petrolio-opec-non-raggiunge-le-quote-di-produzione-giornaliera-prevista-offerta-scarsa-prezzi-su/ on Sun, 20 Mar 2022 07:00:47 +0000.