Market Analytics and Technical Considerations
Key Points
In November, OPEC oil output declined, driven by top exporter Saudi Arabia and other Gulf members, according to a Reuters poll, as the larger OPEC+ alliance promised dramatic supply cuts to stabilize the economy in the face of a deteriorating economic prospects.
According to the survey, the Organization of the Petroleum Exporting Countries (OPEC) released 29.01 million barrels per day (bpd) in November, a 710,000 bpd decrease from October. OPEC’s output in September was its highest since 2020.
As demand returned, OPEC and its allies, referred to as OPEC+, increased output for the majority of 2022.The group made its biggest cut since the beginning of the COVID-19 pandemic in 2020, when oil prices fell and there was concern about a recession.
Their choice for November required a 2 million bpd cut in the OPEC+ yield focus, of which around 1.27 million bpd was intended to come from the 10 partaking OPEC nations.
Many suppliers, particularly Angola and Nigeria, lack the capacity to pump more oil, which prevents them from reaching their production goals. This is due to insufficient investment and, in the case of Nigeria, crude theft.
According to the survey, the 10 members’ monthly output decreased by 720,000 bpd, placing actual production 800,000 bpd below the group’s November output target. In October, there was a 1.36 million bpd shortfall.
The survey found that OPEC over-delivered on its pledged cuts in November with a compliance rate of 163% because production was below target.
It is not anticipated that OPEC+ will alter its output policy when it meets virtually on Sunday.
According to the poll, Saudi Arabia lowered its output by 500,000 bpd in November, almost exactly as planned.. Kuwait and the United Arab Emirates imposed the next largest restrictions.
According to the survey, Iraq, OPEC’s second-largest producer, barely decreased output in November despite calling for an increase in its quota. Algeria cut roughly half of the pledged amount.
Thanks to increased exports of Forcados crude, Nigeria had the highest growth in OPEC membership. Little difference in production was observed in Libya, Iran, and Venezuela, all of whom are exempt from OPEC’s production reductions. The Reuters survey’s objective is to keep tabs on supply curve. It is based on shipping information from outside sources,
