Preliminary Opec+ compliance at 101pc in August

Opec+ reached 101pc conformity with its pledge to remove 7.7mn b/d of production from the market in August, largely from an October 2018 baseline, according to three group delegates.

Opec members participating in the agreement were 102pc compliant with their obligations last month, and their non-Opec counterparts met 99pc of their commitments, a delegate said.

The figures are preliminary and will be reviewed and confirmed at the meetings of the Opec+ Joint Technical Committee (JTC) that studies market conditions, and the group's Joint Ministerial Monitoring Committee (JMMC) that observes compliance. The JTC will meet virtually today at 14:00 Vienna time (12:00 GMT). The JMMC will meet tomorrow.

Argus estimated combined Opec+ compliance at 102pc in August, with Opec members achieving 104pc conformity and non-Opec countries meeting 99pc of their pledges.

The group transitioned to unwinding output cuts to 7.7mn b/d over August-December, down from the 9.6mn-9.7mn b/d it targeted in the May-July period. Monthly declines should be deeper than 7.7mn b/d in September, because some countries must compensate for overproducing between May and August.

The compensation mechanism has weighed heavily on quota busters. The UAE — which admitted it produced in excess of its target last month because of high domestic demand — cut all grade export allocations 30pc below nominations in October, and 25pc under buyer interest in November.

By Ruxandra Iordache and Nader Itayim