Newswire – OPEC’s crude production dipped last month as the United Arab Emirates stepped up implementation of supply cutbacks aimed at buoying global oil markets.
Output from the Organization of Petroleum Exporting Countries fell by 120,000 bpd to 27.05 million bpd, with the UAE accounting for most of the drop, according to a Bloomberg survey. Modest gains in Libya and Nigeria were offset by similar-sized reductions in Iran and Kuwait.
Led by Saudi Arabia, OPEC and its allies have been withholding crude output for the past few years in an attempt to defend prices against fragile oil demand and plentiful American supplies. Last month, the coalition agreed once again to delay plans for reviving the halted production.
Yet not all members of the alliance have fully delivered the curbs they promised. While OPEC’s own data indicate that Abu Dhabi is abiding by its quota, other estimates including Bloomberg’s survey indicate the UAE is among countries that are overproducing.
The country’s reduction in December may reflect a push for greater discipline. It slashed oil exports to an 18-month low, tanker tracking data compiled by Bloomberg show. State-run oil giant ADNOC is cutting the allocation of crude oil cargoes for some customers in Asia in January and February, according to companies with contracts to receive the shipments.
As a gesture of commitment to the coalition’s goals, Abu Dhabi agreed when OPEC+ met last month to postpone an extra 300,000 bpd ramp-up it had been accorded in recognition of expanded production capacity. The start of the increase was pushed back from January to April and spread over a longer time period.
Still, the Bloomberg survey indicates that the UAE’s crude production, at roughly 3.2 million bpd in December, remains several hundred thousand barrels above its agreed limit.
*Grant Smith, Julian Lee and Bill Lehane – Bloomberg
