OPEC compliance with the 4.2 million b/d of crude crude agreed in late 2008 peaked in March last year, when the 11 members bound by quotas managed to get their combined production down to 25.61 million b/d, within 765,000 b/d of their target.
OPEC itself, which uses secondary sources to monitor its own output, estimates January volumes from the OPEC-11 at 26.8 million b/d. The International Energy Agency puts the figure at 26.62 million b/d.
Not one of these sets of estimates shows a single member producing within quota.
During an early February visit to London, OPEC secretary general Abdalla el-Badri told reporters that OPEC was expecting the first half of this year to be "very difficult," and that quotas would be important during this period.
Badri, who thinks ministers will be reluctant to tamper with official quotas at the March 17 meeting in Vienna if market and economic conditions remain the same as they are now, urged members to respect their quotas but acknowledged that 100% compliance was "technically...not possible."
The OPEC-11 are, however, far away from 100% compliance. The International Energy Agency pegs compliance at a relatively generous 58% in January. The Platts estimates suggest a compliance rate of 54.4%, while OPEC's own estimates suggest an even lower 53%.
Is steadily diminishing compliance likely to improve? This is a question that can perhaps be answered with another question: Why try to rein in production when international crude futures are trading within the $70-$80/barrel range that OPEC seems to have adopted as an informal price target?
