OPEC oil supply to drop in January, Petro-Logistics says

OPEC oil supply in January is expected to decrease by approximately 400,000 barrels per day, tanker tracker Petro-Logistics said on Monday, suggesting the group had improved its adherence to pledged supply curbs.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, agreed to increase output by 500,000 barrels per day in January as part of a plan to taper huge cuts made last year as the coronavirus pandemic hammered demand.

However, the figures from Petro-Logistics suggest production is lower, and compliance with cuts higher, than in December. A trend of high compliance could lend further support to oil prices, which are near an 11-month high. [O/R]

“The biggest reductions in January supply are expected from Libya, Iraq and Nigeria,” Petro-Logistics, a Geneva-based consultant, said in an email to Reuters.

OPEC’s compliance with pledged supply curbs is close to 100% in January, the company said. That is up from December’s figure of 82% as estimated by Petro-Logistics on Jan. 12.

The non-OPEC countries involved in the pact, of which Russia is by far the largest producer, showed just 64% compliance with the pact in December, according to the company’s estimates.

Petro-Logistics didn’t immediately provide a compliance estimate for OPEC+ production in January.

Two OPEC sources said last week OPEC+ compliance remained strong in December at 99%, although it fell from November’s 101%.

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