Opec output fell 180,000 b/d in February, with Saudi Arabia again the driving force. But the group remains more than 300,000 b/d above its target level, and limited compliance may threaten the prospects of the output target being renewed in May. Saudi Arabia has been burned before by bearing the brunt of output curbs while fellow members maintain production; it does not want a repeat.
Arguably the latest production figures from non-Opec Russia are the most concerning for Saudi Arabia. Russia and 10 other non-Opec countries agreed in December to cut output by 600,000 b/d, with Russia to account for 300,000 b/d. Russian output fell 100,000 b/d in January, but posted a minimal fall in February, staying essentially flat at 11.11mn b/d (MEES, 3 March). Russia overtook Saudi Arabia to be the number one supplier to the key Chinese market last year, and the kingdom won’t want to cede further ground to its rival (MEES, 3 March). (CONTINUED - 746 WORDS)