Adedapo Adesanya
By Adedapo Adesanya
Two members of the Organisation of the Petroleum Exporting Countries (OPEC), Iraq and Nigeria, have complied with an agreement reached early December 2019 to reduce the volume of crude oil production. At a meeting held last month in Vienna, Austria, the oil cartel agreed to drop output by 50,000 barrels per day.
In a survey published by Reuters on Monday, January 7, 2020, it was disclosed that total output fell to 29.50 million barrels per day last month, indicating that compliance level by the OPEC members and allies reached 158 percent.
The survey showed that Nigeria and Iraq, which were both not initially complying with the policy to cut back on production in 2019, met up the requirements as Nigeria delivered the biggest cut of the two countries when it reduced its December production by 80,000 barrels day, producing a total of 1.83 million barrels per day.
It was noted that a chunk of this decline came from reduced shipments of Bonga crude, which traders is currently undergoing maintenance.
Iraq, on the other hand, reduced its production by 50,000 barrels per day to produce 4.6 million barrels per day in the last month.
However, with the new deal contracted at the OPEC+ meeting held on December 6 at its headquarters in Vienna, Austria, members of the cartel from January 1 will put in place additional cut of 500,000 barrels per day to bring about a reduction of output to 1.7 million barrels everyday till March 2020.
The report also showed that Saudi Arabia made a 50,000 barrels per day cut during the month, reaching output of 9.8 million barrels per day while Venezuela, which is excluded from the cuts, managed to boost its production by 40,000 barrels per day, to 720,000 barrels per day.
OPEC will officially publish its official figures on January 15, which would be the first monthly oil report of 2020.
The agreement to cut output was reached in order to keep price of the commodity stable at the global market. Members of the group came together after it was feared that oversupply could continue to crash price of crude oil at the market.
