OPEC released its latest monthly oil market report that showed a drop of 890 kbpd in January production levels showing that OPEC members are making cuts quicker than expected.
The report shows that OPEC members with supply targets cut output to 29.8 mbpd in January 84k above the January 1st target. This indicates that the overall compliance of the OPEC countries was high and achieved 93 per cent of the pledged 1.16 million cut, according to Reuters calculation based on OPEC secondary sources.
Spencer Welch, Director at IHS Energy and OPEC expert said: “Compliance is high, but short of 100 per cent. The key question for the oil market is how long OPEC can sustain this deal.”
Crude oil output decreased the most in Saudi Arabia, Iraq and the UAE, while production in Nigeria, Libya and Iran increased. Iran raised its output in January by about 50,000 bpd
As anticipated, Saudi Arabia delivered the lion's share of reductions. Its production was down by about 496,000 barrels a day but the cut of output to 9.74 million was below its OPEC target.
OPEC raised the 2017 world oil demand growth forecast to 1.19 mbpd up slightly from its previous forecast of 1.16 mbpd.