OPEC oil producers increased their output for a second straight month in August as they and their allies within the OPEC+ relaxed coordinated supply curb on what appeared to be the start of global oil demand recovery after the COVID-19 pandemic. A third-party survey showed oil output from 13 OPEC members stood at 24.27 million bpd in August, up 950,000 bpd from July’s production.
OPEC+ efforts and an easing lockdown have helped Brent crude oil prices to climb above $46/barrel after plummeting to a more than 2-decade low of $16/barrel in April. However, fear on a second wave of COVID-19 infections put a cap on price gains. An OPEC delegate said a full recovery is not there yet and the cartel needs to monitor the market and the pandemic situations closely.
OPEC+ relaxed its coordinated curbs to 7.7 million bpd on August 1 from 9.7 million bpd which started in May. The current cuts are slated to last through the end of the year. According to the survey, OPEC members’ compliance on the deal improved from 95% in July to 99% in August.
Saudi Arabia pumped 9 million bpd of crude in August, up 600,000 bpd from July and marked the most significant increase among other OPEC members. The group’s biggest production ended its voluntary production cut which it enacted along with the UAE and Kuwait. The UAE’s production exceeded its quota last month as hot temperatures boosted demand. Kuwait also raised its output but remained within its new quota.
Iraq and Nigeria managed to reduce output and improved their compliances significantly, the survey showed. However, Iraq’s output reduction was smaller than the country pledged, while Nigeria’s output was still above its quota.
