Daily Energy Report
OPEC delivers the promised cut, US gasoline inventories are critically low, offshore drilling, US refiners, Coal, and more.
CHART OF THE DAY:
Figure (1) above shows OPEC crude oil production based on secondary sources. We divided OPEC into two groups: OPEC Core, which consists of Saudi Arabia, the UAE, Kuwait, and Iraq, and the rest of OPEC, namely Iran, Libya, and Venezuela which are not subject to the quota and not part of the production cut agreement.
The figure clearly shows that the OPEC Core countries are the only producers cutting production.
EOA’s Main Takeaway:
In early October 2022, OPEC+ decided to cut the crude production ceiling by 2 million barrels per day (mb/d). This reduction was not an actual cut simply because many countries were not able to reach their quota, so the cut did not affect them, unlike the countries that were producing at their quota, or the OPEC Core. Please note that we are not including the 10 countries which are part of OPEC+ but are not members of OPEC.
The OPEC Core’s production in February was 20.473 million barrels per day (mb/d), which is 974,000 lower than production in October. In short, they delivered their share of the cut.
The production of non-OPEC Core, or the rest of OPEC, was 8.11 mb/d in October. It increased by 342,000 b/d to 8.45 mb/d in February. Most of the increase came from Nigeria which was under-producing at the time of the decision to slash output, in addition to Iran and Venezuela which are exempted from the reduction.
The bottom line is that OPEC delivered on the cut!
STORY OF THE DAY
EIA: Gasoline and distillates inventories decline by 9.7 mb.