Page 6 - FSUOGM Week 40

FSUOGM COMMENTARY FSUOGM

Ups and downs as OPEC+ levels

broadly maintained

OPEC+ production levels were more or less maintained in September as
increases and decreases balanced each other out

OPEC COMBINED oil production by OPEC+ mem- crude would not be exceeded. It had overpro-
bers increased by 40,000 barrels per day (bpd) duced in both July and August.
in September as the UAE reduced its output by July’s oversupply came despite Abu Dhabi
WHAT: around 10%, balancing out increases from oth- National Oil Co. (ADNOC) having shut down
A major output reduction ers who have struggled to stay within imposed the onshore Bab oilfield in late June to carry out
by the UAE was offset by limits. maintenance. The field, which had been produc-
increases by Iran, Iraq, The Emirates’ cuts brought its oil and con- ing more than 370,000 bpd of light, sour Mur-
Libya and Venezuela. densate output level to 2.43mn bpd – the lowest ban crude, has a capacity of 420,000 bpd, but had
for nearly two years, with crude down around remained offline until late July.
WHY: 310,000 bpd and condensates dropping a fur- In June, the UAE had joined Saudi Arabia
The Emirates have been ther 170,000 bpd. The combined total repre- and Kuwait in cutting extra production vol-
under pressure from sents a reduction of 480,000 bpd from October umes, with OPEC’s three swing producers
OPEC+’s de-facto leader 2018, according to tracking data compiled by reducing output by 100,000 bpd, 1mn bpd and
Saudi Arabia to comply Bloomberg. 80,000 bpd respectively. Prior to the additional
with production cuts. The September reductions offset roughly cuts, the emirates committed to limit production
190,000 bpd of additional output from Iran, to 2.44mn bpd from May until the end of July,
WHAT NEXT: Libya and Venezuela, all of which are exempt giving an estimated net average for the month
Saudi ramped up its from the OPEC+ reduction agreement owing to of 2.34mn bpd.
own exports amid higher their respective domestic struggles, and another During September 1-15 production averaged
demand from buyers in uptick in output from the group’s biggest compli- 2.9mn bpd, dropping by nearly 1mn bpd during
India and South Korea. ance offender Iraq. September 16-30 when it averaged 1.95mn bpd.
As a result of these reductions, exports to
UAE cutback China, India and Japan all fell.
The UAE’s reductions suggest that it is edging
closer to compliance with the cuts, following the Continued non-compliance
assertion by Minister of Energy Suhail Al-Maz- On the flipside, despite having promised to
rouei during the OPEC+ group’s September increase voluntary additional oil production cuts
meeting that the output quota of 2.59mn bpd of to 400,000 bpd below its 3.8mn bpd ceiling in

P6 www. NEWSBASE .com Week 40 07•October•2020