MOSCOW (MRC) -- Top OPEC oil
producer Saudi Arabia made a large cut in its crude output in January to support
prices and lessen a glut, helping boost compliance with the group's
supply-reduction deal to a record high of more than 90%, reported Reuters.
The Organization of the
Petroleum Exporting Countries is curbing its output by about 1.2 MMbpd from Jan.
1. Russia and 10 other non-OPEC producers agreed to cut half as
Supply from the 11 OPEC members with production targets under the
deal fell to 29.888 million bpd last month, according to figures from secondary
sources that OPEC uses to monitor its output. OPEC published the data in its
monthly report on Monday.
Oil prices pared an earlier decline after the
release of the report, trading above USD56 a barrel.
amount to 93% compliance, according to a Reuters calculation based on the OPEC
The International Energy Agency last week estimated compliance
at 90%, calling that a record.
Saudi Arabia told OPEC that it made an
even bigger cut than estimated by the secondary sources, reducing January output
by more than 700,000 bpd to 9.748 MMbpd - lower than called for under the OPEC
The report said production by all OPEC members, including
cut-exempted Nigeria and Libya, fell by 890,000 bpd to 32.14 MMbpd.
demand for OPEC crude in 2017 also expected to average 32.14 MMbpd, the report
indicates there will be zero average surplus if OPEC keeps output steady. Last
month's report pointed to a 985,000-bpd surplus.
In its report, OPEC gave
no compliance figure. Reuters saw an earlier version of the secondary-source
figures last week that put compliance at 92%.
We remind that, as MRC wrote before, in
June 2016, Saudi Arabian Oil Co. and Saudi Basic Industries Corp. (Sabic)
became one step closer to building their first plant to process crude
directly into chemicals, cutting out a link in the production chain from
hydrocarbons to the finished products that go into plastics and other consumer
goods. The state-owned companies signed an agreement to study such a project to
be located in Saudi Arabia, they said in a statement. A joint venture is
possible if the companies decide to move ahead after the study is completed by
early 2017, they said. Oil companies normally refine crude into transportation
fuels including gasoline and diesel and leave byproducts such as naphtha to be
processed separately into chemicals.