Angola reduces oil output to meet OPEC cut deal as Iran ups crude exports

The South African nation of Angola, a member of the Organization of Petroleum Exporting Countries (OPEC), said it will only produce 1.673 million barrels of crude oil a day to meet the cut approved by the oil cartel to help commodity prices increase in an attempt to balance the market.

In 2016, Angola was Africa’s leading oil producer after exceeding Nigeria’s daily average of 1.468 million barrels with an output of 1.775 million barrels.

The country’s National Fuel Society of Angola (SONANGOL) announced that the country should stop pumping about 78,000 barrels a day as part of its contribution so that the OPEC can reduce its daily supply from 33.7 to 32.5 million barrels.

In order to achieve its goal, SONANGOL set internal targets to operators on the basis of their production potentials.

However, oil prices fell earlier as Iran increased its crude exports, undermining efforts by other oil producers to curb a global fuel supply overhang and as US drillers increased activity for a 10th week.

According to traders, the lower prices were a result of rising exports from Iran that came just as other OPEC members cut supplies in an effort to end a global glut.

Iran has sold more than 13 million barrels of oil held on tankers at sea, capitalizing on an OPEC output cut deal from which it is exempted to regain market share and court new buyers, according to industry sources and data.

The amount of Iranian oil held at sea has dropped to 16.4 million barrels, from 29.6 million barrels at the beginning of October, according to Thomson Reuters Oil Flows data.Before that sharp drop, the level had barely changed in 2016; it was 29.7 million barrels at the start of last year, data showed.

Iran’s surging tanker exports weren’t the only indicator of plentiful supplies.

In the US, energy companies also added oil rigs for a tenth week in a row, extending the drilling recovery into an eighth month as crude prices remained at levels at which many US drillers can operate profitably.

Drillers added four oil rigs in the week to January 6, bringing the total count up to 529, the most since December 2015, energy services firm Baker Hughes Inc. said.

As a result of the increased drilling for new production, US oil output has risen by over 4% since its 2016 low to almost 8.8 million barrels per day, although production still remains 8.74% below its 2015 peak.