OPEC output cuts surpass pledge in March

OPEC Secretary-General Mohammad Barkindo says the OPEC output cuts are helping the oil markets gradually and steadily return to balance. OPEC photo.

OPEC output cuts amount to 104 per cent compliance with deal

Last month, OPEC output cuts were higher than participating members had pledged, according to figures from the cartel used to monitor its supply.

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According to OPEC, the 11 OPEC members reached 104 per cent compliance with the pact.  Under the deal, members were to reduce output to 29.804 million b/d, but in March, production fell to 29,757 million b/d.

“OPEC’s compliance has been more than anticipated,” an OPEC delegate told Reuters. “For non-OPEC, it is satisfactory and getting better.”

The drop in production is helping to boost oil prices, which are now trading around $56/barrel, up from $42/barrel this time last year.

OPEC output cuts are expected to reduce the global crude supply glut that lead to a drastic cut in oil prices beginning in 2014.

“We are gradually but steadily on course to seeing a return to balanced oil markets,” OPEC Secretary-General Mohammad Barkindo told Reuters. Barkindo added OPEC and non-OPEC states were seeking “sustainable stability” in the market.

A report by Reuters said including production from Nigeria and Libya, two OPEC members exempted from the deal, output by the 13 cartel members fell in March to 31.939 million b/d, 19,000 b/d under February’s output.

OPEC sources say the cartel is expected to publish its assessment of March output based on secondary sources in its monthly oil market report Wednesday.  The figures could be revised prior to publication as more secondary-source estimates are added.

11 non-OPEC members also joined the supply cut pact and have not cut production as much, partly because of phased implementation of the agreement with Russia.

Kuwaiti Oil Minister Essam al-Marzouq told Reuters on Monday that he anticipates compliance by all producers in the OPEC supply cut deal is expected to rise in March over February’s compliance rate of 94 per cent.