OPEC Q1 oil output hits lowest since start of deal

Russia says looking at joint organization for cooperation with OPEC

LONDON, April 3, (RTRS): OPEC’s oil output in the first three months of 2018 has fallen by 425,000 barrels per day (bpd) from its 2017 average, a company which tracks OPEC supply forecast on Tuesday, indicating strong compliance with a pact to reduce production.

The Organization of the Petroleum Exporting Countries agreed to cut output by about 1.2 million bpd as of January 2017 to reduce inventories and support prices. The pact has been extended until the end of 2018.

Supply from all 14 OPEC countries in the first three months of 2018 averaged 32.27 million bpd, tanker-tracking firm PetroLogistics said in an email, down 425,000 bpd from OPEC’s average daily supply for 2017 as a whole.

“OPEC-14 supply in the first quarter of 2018 declined to the lowest quarterly level since the production curtailment agreement came into effect some fifteen months ago,” Petro-Logistics said.

Compliance with the deal has been high by OPEC standards, as a steep involuntary decline in Venezuela, where output is dropping amid economic crisis, has added to voluntary cutbacks by top producer Saudi Arabia and its Gulf allies.

Petro-Logistics said that when compared with the same period last year, OPEC supply in the first quarter has fallen by 113,000 bpd.

Geneva-based Petro-Logistics is among a number of consultancies that estimate OPEC supply by tracking tanker shipments.

Also:

ANKARA: Russian Energy Minister Alexander Novak said on Tuesday a joint organisation for cooperation between OPEC and non-OPEC countries may be set up once the current deal on oil output curbs expires at the end of this year.

Saudi Crown Prince

Mohammed bin Salman told Reuters last month that Saudi Arabia and Russia are working on a historic long-term pact, possibly 10 to 20 years long, that could extend controls over world crude supplies by major exporters.

Novak said on Tuesday he and his Saudi counterpart, Khalid alFalih, discussed long-term cooperation and that the current “mechanism of interaction” had proved to be effective.

“We are now thinking about a format for cooperation which could be for the longer-term, which would include the possibility of market monitoring, information exchange and if needed the implementation of some joint actions,” Novak told reporters.

Under an agreement by members of the Organization of the Petroleum Exporting Countries led by Saudi Arabia, and non-OPEC producers, Moscow pledged to cut output by 300,000 barrels per day (bpd) from a figure of 11.247 million bpd based on its output in October 2016.

“Oil production restriction is not a panacea, this is a necessary measure,” Novak said on Tuesday, adding that broader cooperation with OPEC is warranted.

He also said that Russia joining OPEC is not on the agenda for discussions.

Relations between Russia and Saudi Arabia have warmed in recent months, in part due to the successful implementation of the global oil pact. Last year, Saudi King Salman visited Moscow.

A high-ranking delegation from Saudi Arabia is expected to attend the Russian economic forum in St. Petersburg in May, where Russian President Vladimir Putin will be present, according to the event’s organisers.

Novak said there were no concrete plans on long-term cooperation yet, while new proposals for cooperation will be discussed during an OPEC ministerial committee tasked with monitoring the output cut deal in the Saudi city of Jeddah later in April.