03.09.202110:59 Forex Analysis & Reviews: Oil deficit continues to swell

OPEC members added another 290,000 b / d to their output last month, which is slightly higher than previously projected. The main contributors were Iraq and Saudi Arabia.

But in reality, the group is pumping 10% less than its total quota as some members - notably Angola and Nigeria - are suffering from deteriorating production capacity and technical disruptions.

It is for this reason that the group, during the meeting last Wednesday, agreed to continue with the plan to ramp up production volumes.

Oil prices stabilized around $ 70 because of the gradual increase of output.

Official data indicate that production averaged 27.11 million b/d in August as Saudi Arabia increased output by 200,000 b/d to 9.63 million, while Iraq added 110,000 b/d to 4.08 million. Both roughly achieved their new and higher goals.

Previously, OPEC reduced their production volumes in order to save the oil industry. This pushed prices below zero.

But as recovery progressed, many expected OPEC's plan to shatter, which did not happen.

Nigeria's output fell again by 90,000 b/d to a five-year low of 1.43 million in August, after

Royal Dutch Shell announced the failure of a key loading facility in Forcados.

Meanwhile, Angola, which managed to maintain a stable production at 1.11 million b/d last month, produced several hundred thousand barrels less than the permitted volume. The main reason is the outflow of foreign investment and a decrease in capacity in deep-water oil fields.

All this led to OPEC analysts believing that supply will remain insufficient this year, even if the alliance fully implements its planned monthly increases of around 400,000 b/d.