dglobalnews.com OPEC's Production Cuts Compliance Rate Reaches 94% In February
Published: Fri, March 03, 2017
Markets | By Armando Jensen

OPEC's Production Cuts Compliance Rate Reaches 94% In February

OPEC's Production Cuts Compliance Rate Reaches 94% In February

The outlook for the oil complex remains murky, with a wide array of views on a number of key factors for prices, including the lasting impact of the output cuts associated with the November 30 OPEC/non-OPEC agreement and the direction of US oil production. According to Reuters, OPEC members complied with the agreed cuts by 82-percent.

Estimates so far of how well OPEC has complied with the production agreement have reassured analysts, but "Russian data released this morning for February shows that output remained largely stable month on month, suggesting that compliance on the non-OPEC side is not likely to see significant gains", said JBC Energy in a note. While OPEC countries are mostly compliant on the production cut, a succumbing thought of anyone can cut their ties is still a lingering possibility.

But if USA output continues to increase at the current rate, OPEC will eventually be forced to reassess its production cuts and start protecting its market share again.

However, oil has not been able to breakout of the tight range it has been stuck in for the most part of this year. In December, Saudi Arabia's refinery output reached 2.96 million barrels per day, the highest level in nearly 15 years.

OPEC announced a production target of 32.5 million bpd at its November 30 meeting, which was based on low figures for Libya and Nigeria and included Indonesia, which has since left the group.

Oil prices were also pressured by the USA dollar rising on increasing odds of an interest rate rise by the Federal Reserve as early as later this month. Iran agreed to a cap that was 90,000 bpd higher than its level in October 2016 (as reported by the OPEC Secretariat), but recent public statements from Iranian officials have put the country's current output higher than the cap.

Hugh Jackman Has An Unlikely Choice For Who Should Play Wolverine Next
Veering away from the standard female superhero trope, she is the most ruthless, savage, and unsafe character in the film. It's the supposed swan song for Hugh Jackman as the character, who you might know better by his other name: Wolverine.

USA crude stocks have increased for seven weeks consecutively.

The date from governments and ship-racking services also said the buyers - China, India, South Korea and Japan- imported 1.89mn barrels per day.

The rise in refinery utilization may have limited the size of the crude build but also limited the size of the draw in gasoline inventories.

Refinery utilization rose 1.7 percentage points to 86% of operable capacity, still well below 88.3% seen at this time previous year.

Lower crude oil prices have a negative impact on oil and gas producers' earnings like Apache (APA), Devon Energy (DVN), Matador Resources (MTDR), and Goodrich Petroleum (GDP).

Like this: