OPEC’s 2017 production cuts: a confusing numbers game (part 1)
What the agreement said
Fig 1: Production table from OPEC’s press release referred to as “agreement table”
“1. In the fulfilment of the implementation of the Algiers Accord, 171st Ministerial Conference has decided to reduce its production by around 1.2 mb/d to bring its ceiling to 32.5 mb/d, effective 1st of January 2017;
2. The duration of this agreement is six months, extendable for another six months to take into account prevailing market conditions and prospects;
3. To recognize that this Agreement should be without prejudice to future agreements;
4. To establish a Ministerial Monitoring Committee composed of Algeria, Kuwait, Venezuela, and two participating non-OPEC countries, chaired by Kuwait and assisted by the OPEC Secretariat, to closely monitor the implementation of and compliance with this Agreement and report to the Conference;
5. This agreement has been reached following extensive consultations and understanding reached with key non-OPEC countries, including the Russian Federation that they contribute by a reduction of 600 tb/d production.”
http://www.opec.org/opec_web/static_files_project/media/downloads/press_room/OPEC%20agreement.pdf
OPEC’s Monthly Oil Market Report November 2016
Fig 2: OPEC’s crude production according to secondary sources
Mysteries solved
So let’s do some bean counting on the above tables. We go down to the last kilo barrel not because we would have a particular confidence in the accuracy of data at this level but because we can then trace more easily where the numbers come from.
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