Baku, Azerbaijan, Jan.19
By Leman Zeynalova – Trend:
The level of compliance with OPEC/non-OPEC deal to cut oil production stood at 129 percent in December 2017, according to January Oil Market Report of the International Energy Agency (IEA).
“A plunge in Venezuelan supply cut OPEC crude output to 32.23 million barrels per day (mb/d) in December, boosting compliance to 129 percent. Declines are accelerating in Venezuela, which posted the world's biggest unplanned output fall in 2017,” said the report.
Taking Venezuela first, production has been sliding for a long time - it is now about half the level inherited by President Chavez in 1999 - and in December output was 490,000 b/d lower than a year ago, having fallen to 1.61 mb/d, according to IEA estimates.
“It is reasonable to assume that the decline will continue but we cannot know at what rate. If output and exports sink further other producers with the flexibility to deliver oil similar in quality to Venezuela's shipments to the US and elsewhere, including China, might decide to step in with more barrels of their own,” said the report.
IEA analysts pointed out that the oil market is clearly tightening; in the three consecutive quarters 2Q17-4Q17 OECD (Organization for Economic Co-Operation and Development) crude stocks fell by an average of 630,000 b/d.