Opec: Market rebalancing at slower pace, May output up
LONDON: Opec said on Tuesday a long-awaited rebalancing of the oil market was under way at a “slower pace” and reported that its own output in May jumped due to gains in nations exempt from a pact to reduce supply.
In a monthly report, the Organisation of the Petroleum Exporting Countries (Opec) said its output rose by 336,000 barrels per day (bpd) in May to 32.14 million bpd led by a rebound in Nigeria and Libya, which were exempted from supply cuts because unrest had curbed their output.
The boost means Opec is pumping more than its forecast of average global demand for its crude this year, hindering efforts to reduce a glut. But Libyan and Nigerian output remains volatile, meaning the gain may not last.
Opec said oil inventories in industrialided countries dropped in April and would fall further in the rest of the year, but a recovery in US production was slowing efforts to get rid of excess supply.
Oil prices gave up gains on Tuesday after the release of the report to trade toward US$48 (RM204.50) a barrel, below the US$60 level that top Opec producer Saudi Arabia would like to see and less than half the level of mid-2014.
Under the deal to support the market, Opec is curbing output by about 1.2 million bpd while Russia and other non-Opec producers are cutting half as much. With the glut slow to shift, producers agreed in May to prolong the accord until March 2018.
In the report, Opec pointed to continued high compliance by its members with the supply deal and said oil stocks in industrialised nations fell in April – although they are still 251 million barrels above the five-year average.
Supply from 11 Opec members with production targets under the accord – all except Libya and Nigeria – averaged 29.729 million bpd last month, according to figures from secondary sources that Opec uses to monitor output.
That means Opec has again complied more than 100% with the plan, according to a Reuters calculation. Opec did not publish a compliance number. – Reuters