Opec+ compliance up to 116pc in October: delegates

Opec+ compliance with the group's crude output restraint agreement edged higher last month as several members struggled to bring back production to meet their rising quotas.

Average compliance was 116pc in October, compared with 115pc in September, according to a document seen by Argus. The 10 Opec participants were 121pc compliant with their October commitments, up from 115pc in September, while conformity among their non-Opec counterparts fell to 106pc from 114pc. An Opec+ delegate said the figures exclude Mexico, which has not accepted a formal quota since July 2020 but remains part of the coalition and is sometimes factored into internal Opec+ calculations.

The figures are broadly in line with Argus estimates, which put total compliance at 115pc in October, with Opec participants 120pc and non-Opec at 107pc.

The overcompliance is partly driven by Nigeria and Angola struggling to grow production. Both were around 240,000 b/d under their respective Opec+ targets last month.

While overcompliance was welcomed last year when demand collapsed in the wake of the pandemic, the Opec+ group is now facing pressure from key oil-consuming countries to raise output faster to soften global oil prices. The US in particular has been pushing for higher Opec+ supplies and is now mulling a series of domestic countermeasures including a potential release from its Strategic Petroleum Reserve (SPR).

Two Opec+ delegates said reports that the US has invited China and South Korea to consider co-ordinated SPR drawdowns are unlikely to pressure the coalition to hike production any faster, as the group considers the market to be well supplied. Opec+ ministers have previously expressed concern about a prospective seasonal surplus in the first quarter next year, with Opec secretary-general Mohammed Barkindo saying earlier this week that global oil inventories could start to build as early as December.

If Washington were to co-ordinate a SPR release with other countries, the US would effectively be behaving like a member of the Opec+ deal in trying to boost supply and reduce stocks, according to one delegate.

By Ruxandra Iordache