OPEC reduces production again in price maintenance program
OPEC producers took another 153,000 barrels a day off the market in March as part of its bid to drain the world’s oil glut.OPEC is still trying to adjust to the slowing of US imports as more shale oil comes online. Supply still exceeds demand by over 400,000 barrels a day. This is despite the inability of some member countries to produce near their previous figures because of mismanagement and conflicts.
In the cartel’s monthly report released Wednesday, independent sources reported the group of oil-producing countries has cut output by 1.1 million barrels a day since December.
Last month, Libya’s output dropped by nearly 9 percent, and production edged lower in the United Arab Emirates, Venezuela, Nigeria, Iran, Angola and other countries. Saudi Arabia raised production by 41,000 barrels a day.
That effort has pushed oil prices above $50 a barrel in recent months, breathing life into U.S. oil patches like the Permian Basin. U.S. crude rose 16 cents on Wednesday to $53.56 a barrel on the New York Mercantile Exchange, as traders reacted to media reports that Saudi Arabia, the cartel’s de facto leader, wants to see OPEC continue production cuts into the second half of this year.
But even as the Organization of Petroleum Exporting Countries works to slow the onrush of oil, it expects increasing resistance from American shale producers and other non-OPEC countries. The group revised its projection for U.S. oil production up by 200,000 barrels a day.