IEA: OPEC Output Cuts at Record 90% Compliance

OPEC members have reached a record compliance of 90% with their agreed output cuts, the International Energy Agency said Friday.

The Organization of Petroleum Exporting Countries on Nov. 30 agreed to cut its production from January by 1.2 million barrels a day to end a persistent oil glut. In December, Russia and other producers outside the group committed to take 558,000 bpd out of the market.

In its closely watched monthly report, the agency, which advises industrialized nations on energy policies, said the group's production fell by 1 million bpd to 32.06 million barrels a day in January compared with the previous month. 

This "first cut is certainly one of the deepest in the history of OPEC output cut initiatives," the IEA said.

While members bound by restrictions reached 90% of their commitments, it took them two months to reach about 80% back in 2009--the previous time the group agreed to pull back its output. 

The Paris-based organization said if the January level of compliance were maintained, the output reductions combined with strong demand growth should help ease the record stocks overhang in the next six months by around 600,000 bpd.

But the numbers reflect differing levels of compliance. Saudi Arabia, Qatar and Angola cut more than they had pledged, the IEA said.

Saudi Arabia, world's largest oil exporter, reduced its production by 560,000 bpd from the reference point of October, about 70,000 bpd above its targeted cut.

But Iraq complied to about half of its agreed cuts and Venezuela, which was first to campaign for an output cap, reduced its output by a meager 18%. Lower production was also partly offset by higher flows from Libya and Nigeria, which are exempt from the cuts.

Production in Russia, which has committed to carry over half of the reductions agreed by non-OPEC producers in a phased manner, fell by 100,000 bpd a day in January, one-third of its committed cuts. Global oil supplies plunged nearly 1.5 million bpd in January, the IEA said.