Opec+ compliance slips to 99pc in December

The Opec+ alliance achieved 99pc compliance with its collective production cut in December, according to two Opec+ sources, down from 101pc in November.

The group's 10 participating Opec countries were 103pc compliant with their cut pledges last month, down from 104pc in November, while the 10 non-Opec participants were 93pc compliant, also down on the month from 95pc.

Non-Opec compliance has been edging down month-on-month since hitting a peak of 99pc in August.

Compliance numbers are preliminary until they are confirmed by the Opec+ group's Joint Ministerial Monitoring Committee (JMMC) which is next scheduled to meet on 3 February.

The Joint Technical Committee (JTC) – which typically meets before the JMMC and studies market conditions – is scheduled to meet on 2 February.

Argus estimated Opec+ compliance at 100pc in December: 105pc for Opec countries, and 92pc for non-Opec.

The JTC and JMMC will be meeting for the first time since the Opec+ group agreed earlier this month to hold their collective output at January levels through the end of March, albeit with the exception of Russia and Kazakhstan, which were each given the green light to raise output marginally over the coming two months.

Russia and Kazakhstan will see their respective quotas rise by 65,000 b/d and 10,000 b/d in February, and once again in March.

But these modest increases will be more than compensated for by an additional 1mn b/d voluntary cut that the group's de facto leader Saudi Arabia pledged to make in February and March, on top of its existing commitment.

The voluntary cut was made "with the purpose of supporting our economies of our friends and colleagues…for the betterment of the industry," Saudi oil minister Prince Abdulaziz bin Salman said. "It's a win-win situation. If things go back…we have taken pre-emptive action. If they do not, it just expedites the balancing of this market."

The Opec+ group's current production cut agreement is scheduled to last until April 2022.

By Ruxandra Iordache and Nader Itayim