OPEC has met 98.5% of its total combined cuts from the 10 member countries participating. Members moved closer to full compliance in meeting their production cut agreement signed in December last year, as output in February fell from January levels to average 32.03 million bpd, according to the S&P Global Platts survey.
“A Saudi-led OPEC is showing the market it is serious in making the agreement stick. While it remains an open question whether OPEC will achieve its goal of drawing down stocks sufficiently to rebalance the market, OPEC is fulfilling its commitment, certainly in contrast to non-OPEC partners who are some ways from cutting down to their agreed levels,” said Herman Wang, OPEC Specialist, S&P Global Platts.
Under the agreement, OPEC pledged to cut 1.2 million bpd for six months and freeze production at around 32.5 million bpd, including Indonesia, which suspended its membership in November and is not included in the Platts survey estimates for 2017. OPEC as a whole averaged 32.11 million bpd in January and February, according to the survey. Adding in Indonesia’s typical 730,000 bpd of production would take the producer group about 340,000 bpd above its ceiling.
There are also 11 non-OPEC countries that are participating in the production cuts. The non-OPEC countries, led by Russia, have agreed to dial back production by a combined total of 558,000 bpd.