Oil production of OPEC in January decreased by 0.890 million barrels per day on a monthly basis, according to the monthly report of the cartel. So the group confirmed that Member States generally fulfill the agreement to reduce production. The yield of the member countries of OPEC in January amounted to 32.139 million barrels per day to 33.029 million barrels per day in December.
The price of the Brent oil fell by 0.56% to 56.38 USD per barrel immediately after the news.
Libya and Nigeria, however, are not included in the agreement and have increased yields in the last month, so that the production side of the transaction actually declined by 1.032 million barrels per day in January. Most of the decline has contributed Saudi Arabia, as the country reduced yields by 496,200 barrels per day in January. Iraq, UAE and Kuwait have forced cuts respectively by 165,700, 159,300 and 141,200 barrels per day.
Of the remaining Member States in the deal only Iran did not reduced its production. The production of the country increased by 50,200 barrels per day during the first month of the year. Russia is the largest producer outside the cartel involved in the transaction declined yields by 60,000 barrels per day to 11.03 million barrels per day. The data of OPEC largely match report Friday by the International Energy Agency, showing that the rate of compliance of participating countries is about 90%. The difference between the two reports in production levels by OPEC member states in the deal was only 17,000 barrels a day, according to the IEA it comes to 29.93 million barrels per day.
The average price, paid for the crude oil of OPEC, was 52.40 USD per barrel in January, representing a 1.4% increase on a monthly basis. The real difference, however, can be seen in the data on an annual basis, the price in January was twice higher than the 25 USD paid for oil OPEC in January 2016.
“During January the global oil prices were traded in a narrow range, supported by anticipated adjustments in production from OPEC, while feeling the pressure and the growing production in the US and the accumulation of reserves of crude oil”, says the OPEC report.
There is a big difference, however, between reports of OPEC and IEA regarding the growth of global oil demand. IEA adjusted data for 2016 in its report of February to growth of 1.6 million barrels per day. It is about 0.280 million barrels per day more than the revised estimate of OPEC to 1.32 million barrels per day. For 2017, OPEC predicted that oil demand will grow by 1.19 million barrels per day, IEA by 1.4 million barrels per day.