OPEC’s pledge was to cut some 1.2 million bpd, while other producers including Russia would bring the total reduction to almost 1.8 million bpd.
However, some OPEC members including Nigeria and Libya have been exempt from cutting, and their rising output undermines efforts led by Saudi Arabia.
Meanwhile, production in the United States – which is not participating in the deal – has jumped by more than 10 percent over the past year to 9.33 million bpd.
“Production growth in Libya and Nigeria and continued rig additions in U.S.are complicating the picture, raising doubts on OPEC’s strategy. For OECD inventories to return to the normalized levels, OPEC needs to drain by 34 million barrels a month or 1 million barrels for the next 10 months. This looks challenging,” AB Bernstein said.
The International Energy Agency (IEA) said this week that oil supplies next year would still outpace demand despite consumption hitting 100 million bpd for the first time.