OPEC production fell to a four-year low in January as the cartel applied a new pact to boost global oil prices, the International Energy Agency said Wednesday, but Russian Federation and other ex-Soviet states failed to cut back output as much as promised.
OPEC, Russia and other non-OPEC producers, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from January 1 to prevent excess supply building up. That amounts to 86 percent compliance with pledged cuts, according to a Reuters calculation.
Kazakhstan increased production, while Azerbaijan only cut 15 percent of what it had promised.
Markets are tightening because of voluntary production cuts, effective since January 1, led by the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russian Federation, aimed at forestalling a global glut.
Overall, global supply fell by 1.4 mbd to 99.7 mbd in January, according to the IEA, which said cuts imposed by authorities in the province of Alberta in Canada, which is not party to the Vienna Agreement, also contributed to the reduction.
Global oil cartel Opec said Tuesday it sharply reduced crude oil production last month, after heavyweight Saudia Arabia slashed output and exports fell in crisis-hit Venezuela.
Oil prices rose on Tuesday amid OPEC-led supply cuts and USA sanctions against Iran and Venezuela, although analysts expect surging US production and concerns over economic growth to keep markets in check.
"Oil prices have not increased alarmingly because the market is still working off the surpluses built up in the second half of 2018, when global supply is estimated to have exceeded demand by 1.3 mbd", said the IEA. "Reports are emerging that PDVSA is scrambling to secure new markets for its crude, after the United States placed additional sanctions on the country", ANZ bank said on Monday.
IEA figures show Venezuala's output dropping by roughly 30,000 barrels per day to 1.26 mbd.
"So far, there are no signs that other producers, e.g".
Brent crude rose two per cent to $62.74 a barrel.
The IEA also raised its estimate for the increase in non-OPEC crude supply in 2019 to 1.8 mbd, which is 0.3 mbd higher than previously.