Just as the oil cartel prepares to enact a production cut to help reduce a global oil glut and push prices back up, OPEC is producing more oil that it ever has before. Reuters reports:
Supply from OPEC increased to 34.19 million barrels per day (bpd) in November from 33.82 million bpd in October, according to the survey based on shipping data and information from industry sources. […]
Based on the November survey, OPEC is pumping 1.69 million bpd above the 32.50 million bpd production target that it agreed last week to adopt from January 2017, following an outline agreement reached in September. […]
In November, Angola provided the largest supply boost as planned maintenance on the Dalia crude stream ended. Output also climbed in Iraq due to record exports, lifting supply to 4.62 million bpd in November according to the survey. Iran, which was allowed to raise output under the OPEC deal as sanctions had crimped its supply, pumped 40,000 bpd more.
OPEC’s petrostates aren’t the only ones racing to squeeze out as much oil out of the ground as possible before they actually have to walk the walk and make the necessary output cuts that—they hope—will induce a sizable and lasting rebound. Russia is doing the exact same thing, having just posted record high numbers for post-Soviet crude production.
In Russia’s case, however, the reasoning behind this last-minute production surge is more understandable, as the country’s deputy energy minister already indicated that Moscow plans to use its November numbers as a baseline against which it will measure any future cuts. By contrast, OPEC has set a firm number as a target for its cuts, which means that its burgeoning output will only make the coming task that much more difficult.
Of course, simply meeting its own targets won’t be the most difficult part of this strategy for the cartel. Dealing with rising U.S. oil production from shale will play that role.