PARIS – The International Energy Agency said on Thursday that members of the Organization of Petroleum Exporting Countries had failed to comply with the production limits they had agreed on six months previously, according to July’s Oil Market Report.
The monthly report said OPEC’s compliance was estimated at 78 percent, compared with 95 percent in May.
It said that even non-OPEC countries participating in the agreement, such as Russia, had complied at 82 percent.
The OPEC’s 14 member states and 10 of its competitors, Russia included, agreed in November to cut back oil production by 1.8 million barrels per day as from January.
The cuts were expected to remain in place until the agreement’s expiry in March 2018, in a bid to stop sliding oil prices.
The IEA noted that crude oil prices had eased from an early June peak above $52 per barrel, but now traded within a $45-$50 range and that “few investors expect a recovery anytime soon.”
In June OPEC’s crude output rose by 340,000 barrels per day to totals of some 32.6 million barrels per day, setting the highest extraction rates in 2017.
Saudi flows increased and Libya and Nigeria, spared from cuts, pumped at stronger rates, the report said.
The IEA estimated both countries will extract over 700,000 barrels per day as compared to the previous month.
This action would effectively wipe out two-thirds of OPEC’s oil cutbacks and will contribute to delaying a re-balancing of the oil market.
Fracking in the United States also played a role in this panorama as output has been constantly growing for the past 33 weeks, as seen in the lower oil prices.