A Reuters survey showed on Thursday that the increase in OPEC oil production in December was also less than the increase planned under an agreement with allies, highlighting the constraints faced by production capacity that curb supply amid Global demand recovering from the repercussions of the Corona pandemic.
The survey found that the Organization of the Petroleum Exporting Countries (OPEC) pumped 27.80 million barrels per day in December, an increase of 70,000 barrels per day from the previous month, but it did not reach the increase allowed under the supply agreement of 253,000 barrels per day.
OPEC and its allies, in the group known as OPEC+, are gradually easing production cuts agreed in 2020 as demand that collapsed that year recovers.
However, many small producers cannot increase production, and others are afraid of pumping large quantities for fear of renewed setbacks due to the pandemic.
The OPEC + agreement allowed a production increase of 400,000 barrels per day in December from all members, of which the share of the ten OPEC members participating in the agreement was about 253,000 barrels per day, according to what OPEC figures seen by Reuters showed.
The survey indicated that with a decrease in actual production from the planned increase, the rate of OPEC’s commitment to the pledged cuts rose to 127% in December from 120% in the previous month.
The members of the OPEC + bloc met on Tuesday and agreed to proceed with pumping an additional 400,000 barrels per day in February, indicating that the difference between actual and promised supplies may widen unless major producers compensate for the deficit.
The biggest increase in December came from Saudi Arabia, the largest producer in OPEC, as it raised its production by the agreed amount.
Angola ranked second, with five additional shipments in December, according to loading programmes. Production is still on a downward trend in the long term, and the survey showed that Angola’s compliance with the agreement stands at 315 percent, which is among the highest in OPEC.
Then came the UAE and Algeria, as each committed to its highest share, and Venezuela, exempt from the agreement, pumped larger quantities, with a continuous decline in its production for years.
The survey showed that in Congo, Equatorial Guinea, Nigeria, Libya and Iran, production decreased or did not increase, due in many cases to the inability of the production capacity to pump additional quantities or to sudden failures.
Libya, another country exempt from production restrictions, recorded the largest drop, reaching 100,000 barrels per day. On December 20, Libya announced the activation of the force majeure clause on exports from the ports of Zawiya and Mellitah.
Nigeria had the second largest decline due to the activation of the force majeure clause on the exports of Forcados crude.
Iran pumped oil at stable rates in December.
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