October proved to be a record month for the Organization of the Petroleum Exporting Countries (OPEC) for oil production, with 33.54 million barrels per day (b/d) being pumped per day. S&P Global Platts, the leading independent provider of information and benchmark prices for the commodities and energy markets, surveyed OPEC and oil industry officials and stated that October marks the fifth consecutive month of increased production, rising 300,000 b/d from September.
OPEC, which pumps about 40 percent of the world’s oil, remains committed to the agreement they made in Algiers last month to trim output for the first time in eight years. OPEC ministers on September 28 agreed to a preliminary deal to freeze production between 32.5 million and 33 million b/d.
They are trying to persuade producers from outside the group, such as Russia, the world’s biggest energy producer, to join the cuts, and Russia so far is on board to limit production in order to re-balance the market. OPEC must, in turn, agree to cap its production.
OPEC wants to put the changes into effect when it meets in Vienna on Nov. 30, with the agreement to last one year starting in January. The group has held talks over the past weeks with other producer nations Russia, Azerbaijan, Brazil, Kazakhstan and Mexico.
“OPEC’s freeze math has gotten more complicated, as its countries keep pumping more,” said Herman Wang, senior writer for S&P Global Platts. “With OPEC having self-imposed a November 30 deadline to finalize the freeze, the pressure will be on to deliver a deal that the market views as credible. Progress towards that goal has been slow, and a fifth straight month of record high production won’t help.”
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