OPEC oil output is likely to fall for a third straight month in March, a Reuters survey found on Wednesday, as the United Arab Emirates made progress in trimming supplies while maintenance and unrest cut production in exempt nations Nigeria and Libya.
The reduction by the UAE has helped boost OPEC compliance this month with its production-cutting deal to 95 percent, up from an initial February estimate of 94 percent and a record high, according to Reuters surveys.
The Organization of the Petroleum Exporting Countries pledged to reduce output by about 1.2 million barrels per day (bpd) from Jan. 1 – the first accord on supply curbs since 2008. Non-OPEC countries pledged to cut about half as much.
OPEC wants to end a glut that is keeping oil LCOc1 below $52 a barrel, half the level of mid-2014. But stocks are still high despite strong OPEC compliance, boosting expectations that the group will seek to prolong the agreement.
“OPEC is now facing the prospect of falling short of its objective,” said Stephen Brennock of oil broker PVM. “Bulging global oil stockpiles will not draw down to the five-year average unless OPEC-led cuts are extended.”