OPEC oil output is likely to fall for a third straight month in March, a Reuters survey found, as the United Arab Emirates made progress in trimming, Kallanish Energy understands.
The reduction by the UAE has helped boost OPEC compliance this month with its production-cutting deal to 95%, up from an initial February estimate of 94% and a record high, according to Reuters surveys.
The Organization of the Petroleum Exporting Countries pledged to reduce output by about 1.2 million barrels per day (BPD) from Jan. 1 — the first accord on supply curbs since 2008. Non-OPEC countries pledged to cut about half as much.
In comments made to Reuters, OPEC Secretary-General Mohammad Barkindo said the OPEC and non-OPEC agreement “is gradually, but steadily working its way to restore balance to the oil markets.”
OPEC wants to end a glut that is keeping oil below $52 a barrel, half the level of mid-2014. But stocks are still high despite strong OPEC compliance, boosting expectations the group will prolong the agreement.
March’s biggest reduction came from the UAE, which was slower than Kuwait and Saudi Arabia to trim supply. Output is lower this month because more cuts have been implemented and due to planned maintenance, industry sources said.
The Reuters survey showed Saudi Arabia’s output rose slightly in March from a large reduction in February. Even with March’s increase, the total curb achieved is 564,000 BPD, well above the target cut of 486,000 BPD.
As a result, Saudi Arabia, Kuwait and as of this month, the UAE, compensated for the weaker adherence of other members, including Algeria, Ecuador, Gabon and Venezuela.