OPEC Oil Production for May

Reuters has a report on how OPEC is dealing with output.

First, OPEC is supposed to cut by 1.2 million bpd associated with the 2017 agreement.

Second, output fell to a 13-month low in May.

Third, I found this interesting, "Compliance slipped to 163 percent of agreed cuts in May from 166 percent in April, the survey found, meaning they are still cutting far more than agreed." Compliance slipped vs April, but production still hit a 13-month low. Is the production cuts based on a monthly target -- I suppose it probably is as oil needs probably differ by month.



Reuters also has a table showing May compliance. What is interesting is that is shows how bad off Venezuela is. When OPEC agreed to the 1.2 million bpd cut, Venezuela agreed to cut by 95,000 bpd. They are now down 617,000 bpd. Venezuela's baseline is 2,067,000 bpd. So essentially, they're down around 30% from what they could be producing.

Recently, Saudi Arabia and Russia floated the that production cuts should be reduced by 800,000 to 1,000,000 bpd. The Wall Street Journal had some interesting news to report:

Kuwait and Iran are leading a faction in the Organization of the Petroleum Exporting Countries that are upset about an agreement struck between Saudi Arabia and Russia . . . “Saudi Arabia won’t let oil prices go to $100 because they listen to Trump,” a Kuwaiti oil official told The Wall Street Journal.

Iran, obviously has issues. But let's notice the desire for $100 oil by Kuwait.

Based on decline rates in oil inventory, I suspect that if nothing changes in terms of the supply cuts, the world might see $100 oil by the end of the year.