OPEC production increases in March from the lowest level since 2009 after the collapse of the supply agreement

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© Reuters. OPEC production increases in March from the lowest level since 2009 after the collapse of the supply agreement

From Alex Lawler

LONDON (Reuters) – OPEC oil production in March rose from its lowest levels in more than a decade registered last month as Saudi Arabia boosted supplies following the collapse of the OPEC-led supply agreement, offsetting the impact of declines in Libya, Iran and Venezuela.

On average, the 13-member Organization of Petroleum Exporting Countries pumped 27.93 million bpd last month, according to survey results, an increase of 90,000 bpd from February’s figure, which remained unchanged.

An agreement between OPEC and other producers, within the framework of what is known as the OPEC + group, collapsed on March 6, accelerating a drop in prices that had already started due to the outbreak of the Corona virus. It fell above $ 22 a barrel, its lowest since 2002.

While Saudi Arabia plans to boost supply after the OPEC + deal collapses, OPEC production has not changed much yet because March production export agreements were already in place, said Petro-Logistics, which tracks oil shipments.

“OPEC is offered in March, little changed from February, as it hovers around record low levels … March’s barrel allocations were in place when the OPEC + agreement collapsed on March 6,” Petro-Logistics CEO Daniel Gerber told Reuters.

“Perhaps it is the calm before the storm because many OPEC countries announced the supply and exports to be maximized in April. Initial indications show that export rates from Saudi Arabia, the UAE and Kuwait are starting to rise.”

There was agreement between OPEC, Russia and other producers to cut production by 1.7 million barrels per day until March 31 in order to support prices.

The 10 OPEC nations that have signed up to the agreement went further in March, according to the survey. The compliance rate was 106 percent in March, down from 128 percent in February.

Production is expected to increase further next month. Saudi Arabia will cut refineries in April to increase export potential, an official said, and plans to ship 10.6 million bpd in May.

(Prepared by Ahmed Elhamy for the Arabic Bulletin).

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