OPEC compliance with oil curbs rises to 94 percent in February: Reuters survey

Tue Feb 28, 2017 1:09pm EST
 
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By Alex Lawler and Rania El Gamal

LONDON (Reuters) - OPEC has cut its oil output for a second month in February, a Reuters survey found on Tuesday, allowing the exporter group to boost already strong compliance with agreed supply curbs on the back of a steep reduction by Saudi Arabia.

The Organization of the Petroleum Exporting Countries is cutting its output by about 1.2 million barrels per day (bpd) from Jan. 1 - the first such deal since 2008 to get rid of a glut. Non-OPEC countries pledged to cut about half as much.

Previous OPEC cuts have been mired in mass cheating by its members, making strong compliance by OPEC this time a positive surprise for the market, with prices trading above $55 per barrel -- up from $35 a year ago.

Top exporter Saudi Arabia and its Gulf allies are hoping the cuts will help oil rise a bit further to around $60, five sources from OPEC countries and the oil industry said, to boost exporters' income and industry investment.

"If compliance is high by OPEC and non-OPEC, then I think prices will reach $60," said an OPEC delegate. "If it was higher it would be better, but $60 is fine."

In January, OPEC delivered 82 percent of the promised cuts, according to a Reuters survey and over 90 percent according to OPEC's own report.

The International Energy Agency has said it was impressed with OPEC's compliance, calling it a record level.

In February, supply from the 11 OPEC members with production targets under the deal has averaged 29.87 million bpd, down from a revised figure of 29.96 million bpd in January and 31.17 million bpd in December, according to the Reuters survey.   Continued...

 
FILE PHOTO -  A flag with the Organization of the Petroleum Exporting Countries (OPEC) logo is seen before a news conference at OPEC's headquarters in Vienna, Austria, December 10, 2016. REUTERS/Heinz-Peter Bader