OPEC+ reduces its production by 9.2 million barrels

OPEC and its allies reduced their crude production by 9.2 million BPD last May. This was during the first month of the new pumping cut agreement.

According to a report on the oil market, which OPEC draws up every month, the agreement’s level of compliance was around 95%. The 23 signatory countries promised to reduce their production of black gold by 9.7 million barrels in May, June, and July.

As explained by the coalition, the aggregate pumping of the ten non-OPEC countries decreased by 2.95 million barrels per day in the fifth month of the year. At the same time, the 13 OPEC nations recorded a decrease in their production of 6.3 million barrels per day. Besides, the Vienna-based body has assured that the United States and Canada’s joint production fell by 800,000 barrels in May.

Saudi Arabia made the biggest cut in oil among other countries

According to secondary sources managed by OPEC, the most significant cut in the group’s production was made by Saudi Arabia. The country pumped 3.16 million barrels less, up to 8,492 million BPD daily. The United Arab Emirates extracted 2,477 million barrels per day (1,364 million less), while Kuwait produced 2,198 million barrels per day (921,000 less).

OPEC has also noted the collapse of Venezuela’s oil production. It has reached a record low at 570,000 barrels per day. The previous minimum was reached in January 2003, when 620,000 barrels per day were produced as a consequence of a general strike to force Hugo Chavez to call early elections.

OPEC producers will lose a market share of 5.8 million BPD this year

The group has revised its estimate of OPEC’s global oil demand in 2020 downward to 23.6 million barrels per day. This figure implies that, during this year, the oil producers club will lose a market share equivalent to 5.8 million barrels per day.

The April data suggest that OECD oil stock grew by 107.7 million barrels compared to the previous month. The reserves totaled 3,069 million barrels. This figure is 140.6 million above the average of the last five years. It is also 184 million higher than the data registered a year earlier. The level of reserves indicated that the OECD had oil available for 80.7 days. This represented 18.6 days more than the average of the last five years.

In May, the average price of OPEC crude oil rose by $7.51 compared to April, standing at $25.17 per barrel. The commodity recovered the ground lost by the improvement of the fundamentals of the physical delivery market.