A few minutes ago OPEC published its monthly report for September with data for the end of August. From July to August, OPEC’s production increased by 136,000 to 29.74 million barrels per day. Is that a problem? No, because the agreement to reduce the quantity by 1.2 million barrels per day is currently well above target. At the end of 2018, the figure was 32.08 million barrels per day, 2.34 million barrels more than at the end of August 2019.
So there is still plenty of room for further increases. But after the recent dismissal of the Saudi energy minister, we can probably assume that the Saudis are more likely to focus on further volume reductions? In August, Saudi Arabia increased its production by 118,000 barrels a day. This is not a drama either, because the Saudis are constantly overfulfilling their share of the cuts. And Venezuela? Well, OPEC’s permanent problem child is continuing to cut its production from year to year, month to month. Not because they have global oil market prices in mind, which they want to increase with less supply. No, Venezuela’s economy is in the doldrums, as is the oil industry.
Venezuela’s production continues to fall (currently from July to August -43,000 barrels per day). Since 2017, Venezuelan production has more than halved from 1.91 million to 712,000 barrels per day. And this in a country that has more oil in its soil than Saudi Arabia! Back to the current OPEC report. Compared to the previous month, expectations of global demand for oil for 2019 as a whole have changed by 80,000 barrels per day. This is not really a significant change. For the non-OPEC countries, global supply expectations for 2019 were raised today by 10,000 barrels per day compared to the previous month. That, too, is not a significant change!