Page 11 - NorthAmOil Week 40

NorthAmOil COMMENTARY NorthAmOil

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

GLOBAL COMBINED oil production by OPEC+ mem- July’s oversupply came despite Abu Dhabi
bers increased by 40,000 barrels per day (bpd) National Oil Co. (ADNOC) having shut down
WHAT: in September as the UAE reduced its output by the onshore Bab oilfield in late June to carry out
A major output reduction around 10%, balancing out increases from oth- maintenance. The field, which had been produc-
by the UAE was offset by ers who have struggled to stay within imposed ing more than 370,000 bpd of light, sour Mur-
increases by Iran, Iraq, limits. ban crude, has a capacity of 420,000 bpd, but had
Libya and Venezuela. The Emirates’ cuts brought its oil and con- remained offline until late July.
densate output level to 2.43mn bpd – the lowest In June, the UAE had joined Saudi Arabia
WHY: for nearly two years, with crude down around and Kuwait in cutting extra production vol-
The Emirates have been 310,000 bpd and condensates dropping a fur- umes, with OPEC’s three swing producers
under pressure from ther 170,000 bpd. The combined total repre- reducing output by 100,000 bpd, 1mn bpd and
OPEC+’s de-facto leader sents a reduction of 480,000 bpd from October 80,000 bpd respectively. Prior to the additional
Saudi Arabia to comply 2018, according to tracking data compiled by cuts, the emirates committed to limit production
with production cuts. Bloomberg. to 2.44mn bpd from May until the end of July,
The September reductions offset roughly giving an estimated net average for the month
WHAT NEXT: 190,000 bpd of additional output from Iran, of 2.34mn bpd.
Saudi ramped up its Libya and Venezuela, all of which are exempt During September 1-15 production averaged
own exports amid higher from the OPEC+ reduction agreement owing to 2.9mn bpd, dropping by nearly 1mn bpd during
demand from buyers in their respective domestic struggles, and another September 16-30 when it averaged 1.95mn bpd.
India and South Korea. uptick in output from the group’s biggest compli- As a result of these reductions, exports to
ance offender Iraq. China, India and Japan all fell.

UAE cutback Continued non-compliance
The UAE’s reductions suggest that it is edging On the flipside, despite having promised to
closer to compliance with the cuts, following the increase voluntary additional oil production cuts
assertion by Minister of Energy Suhail Al-Maz- to 400,000 bpd below its 3.8mn bpd ceiling in
rouei during the OPEC+ group’s September August and September to make up for previous
meeting that the output quota of 2.59mn bpd of non-compliance with OPEC+ cuts, data sug-
crude would not be exceeded. It had overpro- gests that Iraq has yet to make much progress
duced in both July and August. with this.

Week 40 08•October•2020 www. NEWSBASE .com P11