Opec compliance with cuts at six-month low...

london — The Opec’s compliance with production cuts fell in June to its lowest levels in six months as several members pumped much more oil than allowed by their supply deal, thus delaying market rebalancing, the International Energy Agency said on Thursday.

The Opec’s compliance with cuts slumped to 78 per cent last month from 95 per cent in May as higher-than-allowed output from Algeria, Ecuador, Gabon, Iraq, the UAE and Venezuela offset strong compliance from Saudi Arabia, Kuwait, Qatar and Angola.

“Each month something seems to come along to raise doubts about the pace of the rebalancing process. This month, there are two hitches: a dramatic recovery in oil production from Libya and Nigeria and a lower rate of compliance by Opec with its own output agreement,” the Paris-based IEA said.

The Organisation of the Petroleum Exporting Countries and several non-Opec producers including Russia have agreed to cut production by around 1.8 million barrels per day until March 2018 to ease a global crude glut spurred by booming US output.

Opec members Libya and Nigeria were exempted from the cuts due to years of unrest that have sapped their output. The two countries have managed to increase their combined production by more than 700,000 bpd in recent months, the IEA said.

“For fellow Opec members, who agreed to reduce production by 1.2 million bpd, to see their cut effectively diluted by nearly twothirds must be very frustrating, especially as their pact has, hitherto, been well observed by historical standards,” the IEA said.

The cuts have stabilised oil at around $45-50 per barrel, but prices have come under renewed pressure in recent weeks due to growing US output and little evidence of global stocks falling from record highs above three billion barrels. —