Crude oil exports from Organization of Petroleum Exporting Countries will ease by 30,000 bpd during the week ending Sept. 12 to 22.590 million bpd, according to new data from Halifax, England-based tanker tracker Oil Movements released late last week, continuing a recent trend that shows “enhanced compliance” with pledged production quotas.
OPEC members agreed to three separate reductions in their production in late 2008 amid the widening economic morass at the time that pummeled global demand for crude oil, culminating in a 4.2 million bpd cut from their September 2008 output level. The pledged reduction in their production took effect Jan. 1, which doesn’t require compliance by Iraq in the 12-member cartel.
OPEC-11 output in September 2008 was 29.045 million bpd, so their pledge would drop their collective production total to 24.845 million bpd.
Historically, OPEC compliance with their self-imposed production cuts—made to support higher oil prices—is about 50 percent. However, members of the cartel, driven by Saudi Arabia, had improved the compliance rate to about 80 percent in the spring, before easing in early summer as global crude oil prices increased. Since then, OPEC has improved their discipline somewhat, although production data on the cartel can be difficult to secure.
Recently released data by OPEC shows production in July at 28.685 million bpd—26.198 million bpd when stripping out Iraq, with the cartel citing secondary sources for those figures. That suggests a compliance rate near 68 percent.
On Aug. 20, Oil Movements reported that OPEC exports for the week ending Sept. 5 would be reduced by 30,000 bpd, with exports for this week ending Aug. 29 down 60,000 bpd.
OPEC exports for the four weeks to Sept. 12 would be down 140,000 bpd. Exports from the Mideast, where most of the cartel members are based, are seen down 130,000 bpd for the second week of September and down 60,000 bpd for the four weeks to Sept. 12.
The data from the tanker tracker service, which is not comprehensive, suggests OPEC-11 has improved their compliance rate through the summer, but will remain below their spring peak. The modest improvement in compliance also comes in front of their meeting next month, with oil ministers gathering in Vienna, Austria on Sept. 9 to evaluate their production targets.
So far, there seems to be no appetite for further cuts among most OPEC members. Senior OPEC officials have suggested the cartel may just rollover the current output levels. This too is the prevailing sentiment among market watchers.
OPEC averages a basket of 12 crude grades for their reference price, which has held above $70 bbl in August. On Aug. 26, the basket price was $70.44, which compares with an August 2008 average of $112.41 bbl.
The OPEC basket of crudes include the Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
