By Adedapo Adesanya
The average price of crudes belonging to members of the Organisation of the Crude Exporting Countries (OPEC) hit a four-month high on Tuesday, August 11.
At the market yesterday, it averaged at $45.21 per barrel, 20 cents or 0.44 per cent higher than the $45.01 per barrel it was sold the previous day, according to OPEC Secretariat calculations released on Wednesday.
This happened as the market saw move over profitable Asian demand figures despite worries caused by a second wave of coronavirus infections.
There were pointers that demand could return to pre-pandemic highs in Asia as economies reopen and activity resumes. Market demand has struggled to recover through the summer as new virus hotspots curb travel activity and delay full reopening.
The crudes had plunged to their lowest points in April this year caused by the novel coronavirus and an oil price crash.
The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
Meanwhile, OPEC countries fulfilled their obligations under oil production cut deal by 97 per cent last month just as it increased by 0.98 million barrels per day to 23.17 million barrels per day.
This was mainly due to Saudi Arabia, which pulled the plug on its extra one million barrels voluntary reduction.
Thus, oil production in Saudi Arabia increased by 0.86 million barrels per day – up to 8.4 million barrels per day. Despite this, Saudi Arabia fully fulfilled its obligations under the OPEC + agreement.
In June, the United Arab Emirates (UAE) and Kuwait also took on additional reduction volumes to their obligations. In aggregate, the three of them reduced production by 1.1 million barrels per day.
Last month, the UAE increased production by 98,000 barrels daily bringing it to 2.43 million barrels per day. Kuwait added 73,000 barrels per day and produced up to 2.16 million barrels per day. July’s production in both Gulf states is also fully in line with the OPEC+ agreements.
Also, key laggard Iraq increased oil production in July by 39,000 barrels per day to 3.75 million barrels per day, which is higher than its production quota established at 3.59 million barrels per day.
The country has, however, pledged to slash output by 400,000 barrels per day to prop up demand in August and September. The cut brings Iraq’s production more in line with goals set out by allied producers.
