Out Producing OPEC

OPEC recently announced intentions to cut their crude oil production by 1.2 million barrels per day with a stated goal of ensuring crude oil “market stability.” Additionally, swing producer Saudi Arabia verbalized support to reduce production. The chart below shows the current production, proposed cuts and quota levels of the OPEC-10 (excluding Iraq.) Interestingly, the two original proponents of the initiative to lower production were Venezuela and Nigeria, two of the countries that are actually underperforming their official production quotas.