OPEC over-delivers on oil cuts, but sees rivals’ output rising

By Alex Lawler

LONDON (Reuters) – OPEC cut oil output in March by more than pledged under a supply reduction deal and said oil inventories had fallen in February, suggesting that its effort to clear a supply glut that has weighed on world oil prices is succeeding.

But the Organization of the Petroleum Exporting Countries also raised its forecast for supplies from non-member countries in 2017 as higher oil prices encourage U.S. shale drillers to pump more, reducing demand for OPEC’s oil this year.

OPEC is curbing its output by about 1.2 million barrels per day (bpd) from Jan. 1 for six months, the first reduction in eight years, to get rid of a supply glut. Russia and 10 other non-OPEC producers agreed to cut half as much.

Oil prices pared gains on Wednesday after the report was released to trade at around $56 a barrel <LCOc1>. Prices are up from about $42 a barrel a year ago. [O/R]

OPEC was upbeat on the outlook for the market in its monthly report.

“Despite some downside risks, general expectations for demand growth for oil products in the coming months remain bullish,” the report said.

“The return of refineries from seasonal maintenance and healthy demand, together with the high conformity observed in OPEC and non-OPEC production adjustments, should enhance market stability and reduce the volatility seen in recent weeks.”

Compliance in March by the 11 OPEC members with output targets under the supply cut deal averaged 104 percent, according to a Reuters calculation based on production figures OPEC published. This is in line with earlier figures seen by Reuters on Tuesday.

OPEC is considering whether to extend the supply cut deal beyond June and most members, including Saudi Arabia and Kuwait, are leaning towards this if all producers, including non-OPEC also agree, OPEC sources told Reuters last month.

(Reporting by Alex Lawler; editing by Jason Neely and Jane Merriman)

Share this article

Follow Offshore Energy Today

Posted on April 12, 2017 with tags .

Events>

<< Aug 2019 >>
MTWTFSS
29 30 31 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31 1

Africa Oil & Power 2019

The Africa Oil & Power conference will bring together an elite class of ministers and senior-level government…

read more >

OWI LATAM 2019

Over the two-day conference, 25+ expert speakers will share exclusive insight on how to develop an integrity, production and P&A strategy…

read more >

Uganda International Oil and Gas Summit 2019

Uganda International Oil & Gas Summit will once again examine the industry’s developments…

read more >

Argentina Oil and Gas Expo 2019

The Argentine Oil and Gas Institute (IAPG) organizes the Argentina Oil & Gas Expo bringing together the most…

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply