OPEC + continues to struggle to produce as much as quotas allow

The OPEC + group continues to post supply increases below monthly production quotas, according to alliance estimates on meeting November crude oil production quotas.

In November 2021, members of the OPEC + deal adhered to production cuts of 117%, Amena Bakr, deputy bureau chief and OPEC chief correspondent at Energy Intelligence, reported on Tuesday, citing delegates to the monthly meeting. of OPEC + in progress.

The high level of compliance with the reductions – over 100 percent – suggests that OPEC + is in fact producing volumes that are overall below collective quotas.

The ten OPEC members bound by the OPEC + Pact – and excluding exempt producers from Iran, Venezuela and Libya – have complied with the massive 122% cuts, while the level of compliance of Russian-led non-OPEC members was 107%, according to Energy Intelligence. Bakr notes.

This suggests that OPEC members of OPEC + encountered more difficulty pumping as much as their quotas required than non-OPEC producers.

The OPEC + group has not met its collective production targets for months and will likely continue to do so in the months to come, analysts say. African OPEC members lack capacity and investment to increase production, Russia is estimated to pump and export volumes below its quota, and the largest producers in the Arab Gulf have the means to increase production but at the expense of reducing their unused production capacity, which for the majority of unused capacity in the world.

The alliance’s inability to meet its production targets (some estimates place overall production at around 650,000 b / d at 730,000 b / d below the collective quota) should support oil prices next year, according to analysts. This underproduction could even become a major asset for oil this year, especially if Omicron’s impact on global oil demand remains limited to jet fuel, as the most recent estimates and analyzes at the end of 2021 have shown.

By Tsvetana Paraskova for OilUSD

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