Crude oil production by the Organisation of Petroleum Exporting Countries (OPEC) and its allies known as OPEC+ shrank by 700,000 barrels per day in November, despite Nigeria’s modest 177,000 bpd additional drilling.
It was the steepest monthly decrease since April, when Russian production plunged due to sanctions, the latest Platts survey by S&P Global Commodity Insights showed.
OPEC’s 13 countries produced 28.87 million bpd, a fall of 850,000 bpd in October, while Russia and eight other allies pumped 13.70 million bpd, up 150,000 bpd.
Nigeria was able to ramp up its crude oil production by 177,000 barrels per day in November, according to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
This increased the total production in November to 1.185 million bpd as opposed to the 1.014 million bpd drilled in October this year.
But when condensates which are usually excluded from OPEC quota calculations were included, the total oil drilled for the month of November was 1.41 million bpd, according to the commission which regulates the upstream of the oil and gas sector.
But S&P stated that the overall decrease came as the alliance began implementing its two million bpd cut to quotas to counter economic headwinds. But with many members, including Russia, vastly underperforming their targets already, the actual physical cuts were always likely to be far less.
The gap between the group’s quotas and actual production remained fairly wide at 1.89 million bpd in November, the survey showed. But this was a huge improvement compared with October, when the shortfall reached 3.273 million bpd. Iran, Libya and Venezuela are exempt from quotas under the OPEC+ agreement.
In total, only 14 of the 22 countries in the coalition actually reduced production last month, the survey found.
Gulf producers Saudi Arabia, the UAE, Kuwait and Iraq led the way, with all of them carrying out hefty cuts, as demand concerns have led to a very bearish sentiment in the oil markets.
These four producers cut a cumulative total of 780,000 bpd last month, accounting for almost all of the group’s supply reduction.
Saudi Arabia cut output by a weighty 440,000 bpd, averaging 10.46 million bpd last month, its lowest since May. The kingdom significantly reduced exports and also drew steadily from its crude inventories, the survey showed.
Meanwhile, the report put Nigeria’s output rise at a four-month high of 1.17 million bpd from the return of key grades Forcados and Brass River.
The country’s Petroleum Minister, Timipre Sylva, recently said the oil sector was finally beginning to see some confidence, as producers were again injecting oil into the pipelines after months of sabotage and security concerns.
For December, the alliance had kept quotas steady, as it assesses the fallout from the European Union’s sanctions banning seaborne Russian crude imports and the G7’s price cap denying western insurance to cargoes sold above $60/barrel.
China’s tentative easing of lockdown restrictions could also provide a boost for the country’s oil consumption and by extension the global demand for crude oil.
