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Petro-Logistics says OPEC appears to be making oil output cut

Published 11/16/2022, 11:22 AM
Updated 11/16/2022, 11:27 AM
© Reuters. An OPEC flag is seen on the day of OPEC+ meeting in Vienna  in Vienna, Austria October 5, 2022. REUTERS/Lisa Leutner
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By Alex Lawler

LONDON (Reuters) - Crude oil exports by OPEC have fallen significantly so far this month, leading tanker-tracker Petro-Logistics said on Wednesday, suggesting members are delivering on their share of the output cut agreed by the group and its allies.

OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies, decided to cut output by 2 million barrels per day, about 2% of world output, from November as concerns of recession grow.

The view from Petro-Logistics is an early assessment of the extent to which OPEC is delivering on the OPEC+ cuts, which it said were decided in the light of an uncertain global economic outlook. U.S. President Joe Biden criticized the decision.

"OPEC exports are significantly lower in the first half of the month, but timing issues meant that the first few days of November were abnormally low," Daniel Gerber, Petro-Logistics' chief executive, told Reuters.

"We expect a slight recovery as we go through the month but volumes look like they're going to be materially down from October's highs."

"I would expect OPEC exports to be down by as much as 1 million barrels per day in November, which suggests that the OPEC+ cuts are being implemented as promised," he said.

OPEC's Vienna headquarters had no immediate reply when asked about the Petro-Logistics comments.

OPEC's share of the reduction is 1.27 million bpd, so a 1 million bpd drop in exports would suggest a sizeable chunk of the agreed reduction is being made to world supply.

Geneva-based Petro-Logistics is among firms that assess oil supply by OPEC and other producers in the 100 million bpd world market by tracking tankers and other methods, due to a dearth of timely information from the producers themselves.

OPEC is scheduled in its next Monthly Oil Market Report on Dec. 13 to publish production figures for November.

© Reuters. An OPEC flag is seen on the day of OPEC+ meeting in Vienna  in Vienna, Austria October 5, 2022. REUTERS/Lisa Leutner

OPEC+ has been boosting output for most of the year to unwind cuts made in 2020 during the worst of the pandemic, and shifted back to lowering production for October.

Members have been failing to make their share of the planned increases due to a lack of output capacity in some countries, which has boosted compliance with the agreed cuts.

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