OPEC PRODUCTION DOWN 970 TBD

PLATTS - OPEC pumped the fewest barrels since March 2015 in January, with crude output plunging to 30.86 million b/d, a fall of 970,000 b/d from December as new supply quotas went into force, according to an S&P Global Platts survey of industry officials, analysts and shipping data.

The month-on-month fall was the biggest since December 2016, the survey found, with Saudi Arabia and the UAE leading the group in production discipline, while Libya kept its largest oil field offline due to security risks.

The 11 OPEC members obligated to reduce oil output under the agreement signed late last year achieved 76% of their required cuts in January, with their production falling 619,000 b/d from October, the benchmark month from which the quotas were determined, except for Kuwait, which is using November.

At the last OPEC meeting in Vienna, the members agreed to slash output by 812,000 b/d, with Russia and nine other non-OPEC allies committing to a cut of 383,000 b/d for the first six months of 2019.

Venezuela, Iran and Libya were exempted from the deal, and those three countries contributed to 25% of OPEC's production decline for January.

Saudi Arabia has backed up the strong words of its energy minister Khalid al-Falih, with January production falling to 10.21 million b/d.

That is below its allocation of 10.31 million b/d under the deal, as crude exports declined by around 500,000 b/d to 7.20 million b/d in January, Platts trade flow software cFlow showed.

It is also the lowest output figure since May 2018 when the kingdom produced 10.01 million b/d.

The UAE, which has recently emerged as OPEC's third-largest producer, pumped 3.07 million b/d in January, down 180,000 b/d from December, in line with its quota.

State-owned ADNOC lowered January nominations by 5-15% for its key crude export grades and this was matched by lower loadings in the month, according to tanker tracking data.

CUTS BY EXEMPT MEMBERS

Sanctions-hit Iran saw its output fall to its lowest level in over six years to 2.72 million b/d, a fall of 80,000 b/d from the previous month.

This drop took place despite a rise in its crude exports as key buyers like Japan and South Korea resumed buying of Iran's oil under US sanction waivers.

Production in Libya plunged to 850,000 b/d, the lowest since July as its largest oil field Sharara remains shuttered since armed forces occupied it in early December.

Venezuelan production dropped 10,000 b/d to 1.16 million b/d in January as the country's political crisis worsened, with key Western nations endorsing opposition leader Juan Guaido as the country's legitimate president.

The Trump administration also announced sweeping sanctions on PDVSA, Venezuela's state-owned oil company, which are aimed at cutting oil revenues for the regime of Venezuelan president Nicolas Maduro.

Despite steady exports in January, PDVSA sources expect crude output to fall sharply this month because of the loss of US naphtha imports, which are used as a diluent to blend Venezuela's heavy Orinoco Belt crude.

Some of OPEC's African members still have to cut more to meet their OPEC quotas.

Nigeria produced 1.87 million b/d, a fall of 30,000 b/d from the previous month but output remains well above its quota of 1.69 million b/d.

Nigeria's ministry officials insist some of the country's crude should be categorized as condensate, which is not subject to production limits.

Africa's largest oil producer is expected to see its crude production rise by almost 20% due to the startup of the giant 200,000 b/d offshore Egina field, with exports to kick off this month.

Iraq, OPEC's second-largest producer, saw its output fall 40,000 b/d to 4.63 million b/d in January, on lower exports.

KEY MEETINGS AHEAD

This is the first month of the coalition's current deal, which is due to last until the end of June, with a review in April.

Oil prices have recovered since December when they fell to a 15-month low, with ICE Brent trading above $60/b this week. OPEC has acknowledged that many factors influencing oil prices remain outside of OPEC's control, including geopolitics and trade disputes.

The alliance has some key meetings coming up with the Joint Ministerial Monitoring Committee meeting due on March 18 in Azerbaijan to assess the deal.

Last month, the JMCC called on its members to redouble their efforts to ensure the market remains balanced in 2019.

An extraordinary meeting is scheduled for April 17 in Vienna, with Russia and nine other non-OPEC allies joining the talks the following day.

OPEC PRODUCTION VS ALLOCATIONS (IN MILLION B/D)

OPEC PRODUCTION (IN MILLION B/D)

Notes: Congo joined OPEC in June, becoming the organization's 15th member. It was not given a quota under the 2017-18 deal.

Qatar left OPEC, effective January 1.

2019 output deal exempts Iran, Libya and Venezuela.

2017-18 output deal exempted Libya and Nigeria

The estimate for Iraq includes volumes from semi-autonomous Iraqi Kurdistan

The next OPEC meeting will be on April 17, with the OPEC/non-OPEC meeting due the next day.

The OPEC/non-OPEC JMMC will meet on March 18 in Baku, Azerbaijan.

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Earlier: 

2019, February, 1, 11:35:00 OIL MARKET IS CALM PLATTS- Russian energy minister Alexander Novak said Wednesday that he does not currently see a need to take any extra measures or call for an extra meeting by the OPEC/non-OPEC group over the crisis in Venezuela. "We haven't discussed the situation with [Saudi energy] minister Falih, or other ministers," Novak told reporters. "The markets are currently calm ... and the volatility is insignificant. So there is no need for the extra meeting of OPEC+, at least the Russian side thinks so."

2019, February, 1, 11:05:00 SAUDIS OIL WILL DOWN BLOOMBERG - Saudi Arabia expects to reduce oil output once again in February and pump for six months at levels “well below” the production limit it accepted under OPEC’s oil-cuts accord, Energy Minister Khalid Al-Falih said.

2019, January, 21, 11:50:00 OPEC CONFORMITY LEVEL 98% OPEC - The JMMC calls on all participating countries of the ‘Declaration of Cooperation’ to redouble their efforts in the full and timely implementation of the supply adjustments to ensure that the oil market remains in balance in 2019.

2019, January, 18, 10:45:00 OPEC PRODUCTION DOWN 751 TBD REUTERS - The Organization of the Petroleum Exporting Countries said in a monthly report that its oil output fell by 751,000 barrels per day (bpd) in December to 31.58 million bpd, the biggest month-on-month drop in almost two years.

2019, January, 16, 11:20:00 OIL MARKET BALANCE REUTERS - “If we look beyond the noise of weekly data and speculators’ herd-like behavior, I remain convinced that we’re on the right track, and that the oil market will quickly return to balance,” said Falih, addressing an oil conference in Abu Dhabi.

2019, January, 9, 11:15:00 OPEC OIL PRODUCTION DOWN 630 TBD PLATTS - OPEC crude production in December tumbled 630,000 b/d month on month, an S&P Global Platts survey of industry officials, analysts and shipping data showed Tuesday, but the organization still has much more cutting to do to reach its new quotas for 2019.

2019, January, 9, 11:10:00 SAUDI'S OIL PRODUCTION DOWN 400 TBD MEOG - Saudi Arabia reportedly cut its crude production by more than 400,000 barrels per day (bpd) in December 2018. Saudi crude production sat at 10.65 million bpd (mbpd) that month, down from 11.07 mbpd in November.