LONDON, Aug 21, (RTRS): US crude inventories are falling more than expected in a sign of the success of OPEC and non-OPEC production cuts, Kuwait’s Oil Minister Essam Al-Marzouq told CNBC Arabia on Monday.
“We are now seeing the impact of those cuts (in the first half of the year) as US oil inventories fall by more than expected,” he said.
“Week after week we are seeing a much bigger-than-expected fall in inventories,” he added.
US crude inventories have fallen for a seventh consecutive week in their largest drawdown in nearly a year, according to the government’s Energy Information Administration.
Stocks fell by 8.95 million barrels in the week to Aug. 11, nearly three times analysts’ expectations and the largest draw since the week to Sept 2.
OPEC oil supply is set to fall by 419,000 barrels per day (bpd) this month, a company that tracks OPEC shipments forecast on Monday, reflecting plans for lower exports by Saudi Arabia and reductions by other producers.
The 14-member Organization of the Petroleum Exporting Countries has agreed to cut output by about 1.2 million bpd until March 2018 in an effort to reduce inventories and support prices.
Compliance with the deal has been high so far but OPEC production hit a 2017 peak in July, in part on increased output from Libya and Nigeria, which were exempted from the pact due to production-sapping unrest.
“OPEC-14 supply is expected to average 32.8 million bpd in August representing a decline of 419,000 bpd as compared to the 2017 high observed in July,” Daniel Gerber, chief executive of PetroLogistics, said in an email.
“OPEC crude oil exports fell by a whopping 750,000 bpd through the first half of August. An increase was observed in Latin American exports while decreases occurred in both the Middle East and Africa.”
Geneva-based PetroLogistics is among a number of consultancies that estimate OPEC supply by tracking tanker shipments.
Supply refers to a country’s crude exports plus its domestic use, rather than to production.
PetroLogistics did not specify which countries were exporting less crude in August.
However, top exporter Saudi Arabia has said its exports would drop to 6.6 million bpd this month, almost 1 million bpd below levels a year ago.
Tanker data suggests shipments from No. 2 exporter Iraq have also fallen this month.