Opec+ produces below target in November as compliance rises
Gulf Times
A worker checks the valve of an oil pipe at an oil field owned by Russian state-owned oil producer Bashneft near the village of Nikolo-Berezovka, northwest of Ufa, Bashkortostan, Russia (file). Production of Russian oil and gas condensate, the latter being excluded from the deal, has been broadly stable in December versus November.
Opec+ compliance with oil production cuts rose to 117% in November from 116% a month earlier, two sources from the group told Reuters, indicating production levels remain well below agreed targets.Compliance from the 10 Opec countries participating in the production cuts reached 122%, with participating non-Opec countries achieving 107%, data seen by Reuters showed.The International Energy Agency (IEA) said in its December oil market report that Opec+ missed its production targets by 650,000 barrels per day (bpd) last month, compared with 730,000 bpd in October.The Opec+ data shows West African producers Nigeria and Angola continued to struggle to pump at target with Angola’s compliance hitting its highest this year at nearly 300%. Nigerian compliance fell by 10 percentage points month on month to 239%, as the country raised production slightly.The two countries have failed to produce at targets in recent years due to underinvestment, persistent maintenance issues and an exodus of international energy companies.Production of Russian oil and gas condensate, the latter being excluded from the deal, has been broadly stable in December versus November.Russian Deputy Prime Minister Alexander Novak has said the country’s oil production will reach pre-pandemic levels by May 2022.Separately, oil prices slumped by about $3 on Monday as surging cases of the Omicron coronavirus variant in Europe and the United States stoked investor worries that new mobility restrictions to combat its spread could hit fuel demand.Brent crude futures fell by $3.16, or 4.3%, to $70.36 a barrel by 1506 GMT, while US West Texas Intermediate (WTI) crude futures were down $3.47, or 4.9%, at $67.39.“Oil prices are getting pummelled again as sentiment turns south and countries ponder deepening restrictions and lockdowns,” said Craig Erlam, senior market analyst at OANDA. “None of this bodes well for crude demand in the first quarter of the year.”The Netherlands went into lockdown on Sunday and the possibility of more Covid-19 restrictions being imposed ahead of the Christmas and New Year holidays loomed over several European countries.US health officials urged Americans on Sunday to get booster shots, wear masks and be careful if they travel over the winter holidays, with the Omicron variant raging across the world and set to take over as the dominant strain in the United States.Meanwhile, US energy companies have added oil and natural gas rigs for a second week in a row.The oil and gas rig count, an early indicator of future output, rose by three to 579 in the week to December 17, representing its highest since April 2020, energy services business Baker Hughes Co said in its closely followed report on Friday.Lower exports are expected from Russia, however, with exports and transit of oil from the country planned at 56.05mn tonnes in the first quarter of 2022 versus 58.3mn tonnes in the fourth quarter of 2021, a quarterly export schedule seen by Reuters showed on Friday.