The Organization of the Petroleum Exporting Countries (OPEC) fell just short of its production goal in January, as a fresh round of output cuts from the 14-nation producer group got under way. The slight miss comes as the group once again cut its outlook for global oil demand in 2019. OPEC also slightly increased its forecast for supply from the United States and other non-OPEC nations.
OPEC is partnering with 10 nonmember nations, including Russia, to keep 1.2 million bpd off the market. The so-called OPEC+ alliance aims to prevent another price-crushing oil glut like the one that gripped the market between 2014 and 2016.
In January, OPEC managed to remove 797,000 barrels per day from the market by holding back supply. The group aimed to cut a combined 812,000 bpd in a bid to drain oversupply from the oil market.
Total OPEC production stood at just over 30.8 million bpd in January, down from 31.6 million bpd in December, according to independent sources cited by the group in its monthly report.
The biggest cuts by far came from top OPEC producer Saudi Arabia. The kingdom pumped about 10.2 million bpd in January, down 350,000 bpd from December and nearly 100,000 bpd below its official quota under the output cutting deal. The kingdom will continue to cut production, reducing output to about 9.8 million bpd in March, Saudi Energy Minister Khalid al-Falih told the Financial Times in an article published on Tuesday.
The next biggest cuts came from the United Arab Emirates and Kuwait, though UAE pumped slightly above its quota last month.
Altogether, half of the participating OPEC countries exceeded their quota during the first month of the deal, though some just barely pumped above target.
The biggest miss came from Iraq, which regularly surpassed its limit during OPEC’s last production cutting deal that ran from January 2017 through June 2018. OPEC’s No. 2 producer pumped nearly 4.7 million bpd last month, 157,000 bpd above its quota.
Nigeria, which was exempt from the last round of output curbs, overshot its cap by 107,000 in January. Figures provided directly from the country showed Nigeria pumped in line with its quota.