OPEC+ compliance slips to 99% in December

Shafaq News/ The OPEC+ alliance achieved 99% compliance with its collective production cut in December down from 101% in November; two OPEC+ sources told Argus Media.

According to Argus analysis, The group's 10 participating OPEC countries were 103% compliant with their cut pledges last month, down from 104% in November, while the 10 non-OPEC participants were 93% compliant, also down on the month from 95%.

Non-OPEC compliance has been edging down month-on-month since hitting a peak of 99% in August.

Compliance numbers are preliminary until they are confirmed by the OPEC+ group's Joint Ministerial Monitoring Committee (JMMC) which is next scheduled to meet on 3 February.

The Joint Technical Committee (JTC) – which typically meets before the JMMC and studies market conditions – is scheduled to meet on 2 February.

Argus estimated OPEC+ compliance at 100% in December: 105% for OPEC countries, and 92% for non-OPEC.

The JTC and JMMC will be meeting for the first time since the OPEC+ group agreed earlier this month to hold their collective output at January levels through the end of March, albeit with the exception of Russia and Kazakhstan, which were each given the green light to raise output marginally over the coming two months.

Russia and Kazakhstan will see their respective quotas rise by 65,000 b/d and 10,000 b/d in February, and once again in March. Argus said.

But these modest increases will be more than compensated for by an additional 1mn b/d voluntary cut that the group's de facto leader Saudi Arabia pledged to make in February and March, on top of its existing commitment.

The voluntary cut was made "with the purpose of supporting our economies of our friends and colleagues…for the betterment of the industry," Saudi oil minister Prince Abdulaziz bin Salman said. "It's a win-win situation. If things go back…we have taken pre-emptive action. If they do not, it just expedites the balancing of this market."

The OPEC+ group's current production cut agreement is scheduled to last until April 2022.

Argus is a media organisation produces price assessments and analysis of international energy.