OPEC and its partners, a 24-nation coalition known as OPEC +, agreed to cut output by 1.2 million barrels per day in early 2019 as a frustrating global economy, and US shale oil production threatened to left the world markets with a bang. That deal replaced a previous round of brakes that began in January 2017.
Nigeria and Saudi Arabia led the push by the Organization of Petroleum Exporting Countries, which collectively rose 200,000 barrels a day to 29.99 million a day, according to a Bloomberg study. The survey is based on estimates from officials, ship tracking data and consultants including Rystad Energy and JBC Energy GmbH.
OPEC crude output rose last month, the first increase since the group and its allies launched a new round of production cuts early in the year to set up a weak global market.
While Saudi Arabia increased production last month, the kingdom is still shrinking much more than promised in the OPEC + deal as it makes additional efforts to balance the market. Riyadh increased production by 50,000 barrels a day to 9.83 million a day in August, a time when domestic consumption usually rises amidst ardent use of air conditioning.
The strategy has sought to raise prices against a worsening global growth outlook and a seemingly volatile trade war between the US and China. Brent futures have dropped more than 20% from a peak in April and traded close to $ 59 a barrel on Monday.
The bigger hurdles than planned by the Saudis are now just balancing fraud by other OPEC members.
Nigeria has not made any of the cuts it pledged and increased production again in August, with 60,000 barrels per day at 1.95 million, the highest level since early 2016. The West African producer has increased production to maximum levels in Egina- n its new offshore oil field operated by Total SA, according to the International Energy Agency.
Russia, the largest producer outside OPEC in the coalition, has also shown signs of overriding its commitments.
The country pumped 11.294 million barrels a day in August, or 104,000 a day more than its limit under the OPEC agreement. Energy Minister Alexander Novak had signaled that reconciliation would slide after Russia cut more than required earlier this year after unprovoked contaminated discovery at its Druzhba pipeline.
A committee comprised of key members of the OPEC + alliance will meet in Abu Dhabi on September 12th to review their progress in stabilizing world crude markets. The full coalition will meet in December in Vienna to consider any action required in 2020./Investing.com