The 12 members of the Organization of the Petroleum Exporting Countries (OPEC) pumped an average 27.98 million barrels per day (b/d) in March, as the oil producer group continued its efforts to slash oversupply and prevent oil prices falling further, according to a Platts survey of OPEC, oil industry officials and analysts just released. This is down 90,000 b/d down from February’s 28.07 million b/d.
Production from the 11 OPEC members bound by quotas fell to 25.61 million b/d, a drop of 110,000 b/d from 25.72 million b/d in February. But this is still 765,000 b/d above their collective 24.845 million b/d output target, the survey showed. Iraq, which does not have a quota, is allowed to produce at will as it struggles to rebuild its oil industry.
“Given that prices have stabilized and output dropped only slightly this month, it’s possible we’ve reached a bottom in OPEC output,” said
Platts Global Director of Oil John Kingston. “If that’s the case, OPEC did a fairly remarkable job in stabilizing the market, at least so far. The supply/demand fundamentals that it faced a few months ago easily could have pushed prices down another $10 or more from their lows. The organization acted decisively, and it shows in the stability around $50.”
Using OPEC’s 29.045 million b/d baseline for the 4.2 million b/d in cuts implemented late last year — its own estimate of September 2008 production from the OPEC-11 — the survey suggests a compliance rate of 81.79% with the cuts, slightly higher than estimated February compliance of 79.2%.
On March 15 during regularly-scheduled talks in Vienna, OPEC opted to maintain its current 24.845 million b/d output target rather than further reduce official levels, noting that the world economy was “in the midst of the worst global economic recession in decades.”
The group, which is scheduled to update its forecasts next week, currently sees 2009 demand for its crude at 29.1 million b/d, 1.8 million b/d less than the 2008 level but higher than what OPEC has pumped so far this year.
OPEC has not published individual quotas, though Platts has calculated estimated quotas based on prior quotas the size of the group’s reduction. Iraq, which does not have a quota, is allowed to produce at will as it struggles to rebuild its oil industry.
The survey shows that only Saudi Arabia, Kuwait and Nigeria produced at or below their production targets.