In November last year, when OPEC members agreed to cut production for the first time since the Great Recession, it was welcomed with great optimism and oil price jumped more than 20 percent, from $45 per barrel to as high as $55 per barrel (WTI). However, that optimism seems to be fading amid higher production from the United States and reports of impatience within the OPEC with lower oil price. Even a fresh agreement in May, between the OPEC and participating non-OPEC producers, failed to lift price. The oil price has declined more than 10 percent since the May agreement. In this article, we review the compliance among OPEC members.
|
|
Target as per OPEC deal |
|
|
|
|
Algeria |
1.039 |
1.047 |
|
1.059 |
|
Angola |
1.673 |
1.692 |
|
1.613 |
|
Ecuador |
0.522 |
0.524 |
|
0.528 |
|
Gabon |
0.193 |
0.206 |
|
0.204 |
|
Iran |
3.797 |
3.759 |
|
3.795 |
|
Iraq |
4.351 |
4.373 |
|
4.424 |
|
Kuwait |
2.707 |
2.702 |
|
2.705 |
|
Qatar |
0.618 |
0.618 |
|
0.615 |
|
Saudi Arabia |
10.058 |
9.954 |
|
9.94 |
|
UAE |
2.874 |
2.842 |
|
2.885 |
|
Venezuela |
1.972 |
1.956 |
|
1.963 |
|
total |
29.804 |
29.673 |
|
29.731 |
According to data from secondary resources, the OPEC remains in full compliance with the agreed production deal in April. However, it is important to note that some members are yet to comply with the agreed level of output.
Algeria, Ecuador, Gabon, and Iraq are yet to fully comply with the deal. UAE produced more than its targeted production. In addition to that, the production from OPEC, in the month of May rose by 336,000 barrels per day, thanks to Libya and Nigeria.
We would continue to monitor the level of compliance with the deal. WTI is currently trading at $46 per barrel and Brent at $2.3 per barrel premium to WTI.
