OPEC lowers oil production in May

By Trend

According to secondary sources, total OPEC-13 preliminary crude oil production averaged 24.19 mb/d in May, lower by 6.30 mb/d m-o-m, as ten OPEC MCs have agreed to adjust down their production from May 2020, Trend reports with reference to OPEC’s Monthly Oil Market Report.

Crude oil output in May decreased almost in all MCs mainly in Saudi Arabia, the UAE and Kuwait.

The share of OPEC crude oil in total global production decreased by 3.6 pp to 26.9 percent in May compared with the previous month. Estimates are based on preliminary data from direct communication for non-OPEC supply, OPEC NGLs and non-conventional oil, while estimates for OPEC crude production are based on secondary sources.

The level of OPEC NGLs historical absolute production has been revised up based on data received by direct communication. OPEC NGLs and non-conventional liquids are now estimated to have declined by 0.08 mb/d y-o-y in 2019 to average 5.26 mb/d, following growth of 0.16 mb/d in 2018.

OPEC NGL output in April declined by 0.07 mb/d to average 5.26 mb/d. Preliminary production in May indicates minor growth of 10 tb/d. For 2020, OPEC NGLs are forecast to decline by 0.03 mb/d to average 5.23 mb/d, due to lower-than-expected NGL output in the remainder of the year compared with 1Q20.

During the 179th Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) held on June 6 all member countries agreed to the five key elements in reaching their unanimous decision. They:

Reconfirmed the existing arrangements under the April agreement.

Subscribed to the concept of compensation by those countries who were unable to reach full conformity (100 per cent) in May and June, with a willingness to accommodate it in July, August and September, in addition to their already agreed production adjustment for such months.

Agreed the option of extending the first phase of the production adjustments pertaining in May and June by one further month.

Recognized that the continuity of the current agreement is contingent on them fulfilling elements 1 and 2 above.

Agreed without dissent that the full and timely implementation of the agreement remains inviolable, based on the five key elements.

The meeting therefore agreed unanimously to extend the first phase of the production adjustment agreed at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting for a further month, to now run from 1 May 2020 to 31 July 2020.