OPEC production rises in August
Oil production from OPEC climbed 70,000 b/d to 30.2mn b/d in August, up from 30.13mn b/d in July as Libyan output surged despite the downward spiral of political chaos in the country, according to the latest (9 September) Platts survey of OPEC and oil industry officials and analysts.
The OPEC total in August represents the highest volume from the oil producer group since August 2013, when output averaged 30.28mn b/d.
The increase from Libya, supplemented by a 50,000 b/d rise in Angolan output and smaller 20,000 b/d boosts from the United Arab Emirates (UAE) and Venezuela, more than offset decreases of 80,000 b/d and 50,000 b/d from Iraq and Saudi Arabia, respectively. Iranian output remained steady at 2.85 million b/d.
‘The second half of this year looked a bit tight, given that OPEC output was significantly less than what the International Energy Agency projected was the “call” for OPEC crude,’ said John Kingston, Global Director of News for Platts. ‘But the August increase reflected here doesn’t include the fact that Libya has moved higher still and doesn’t reflect that Saudi Arabia can easily take some of that high level of production which was being used for summertime domestic electricity generation and put it in the open market. It’s good news that output stayed healthy despite the obvious problems with Iraqi output and, obviously, it’s a good report if you’re a consumer.’
Libya’s crude production averaged 550,000 b/d in August, the country’s highest level for a year, according to Platts estimates. Output has steadily ramped up in August as exports finally resumed from the eastern ports of Es Sider and Ras Lanuf following one year of rebel occupation. Libyan state-owned National Oil Corporation said in early September that it expected production to recover to 1mn b/d by October. Output was last at that level in July 2013, as protesters forced fields to be shut and anti-government rebels began occupation of the country’s key oil export terminals.
International crude prices have been dropping recently, with London trade in early September seeing North Sea Brent sliding below the $100/b level for the first time since June 2013. OPEC’s own crude basket, which had held steadily above $100/b until mid-August, stood at $97/b on 8 September. However, on a year-to-date basis the basket value the following day was $104.58/b.
‘Some OPEC members with limited capacity to compensate for lower prices with higher volumes are likely experiencing some anxiety about the potential for further price drops,’ said Margaret McQuaile, Platts’ Senior Correspondent. ‘But OPEC production policy depends to a large extent on Saudi Arabia, and, despite the dip in Saudi volumes in August, there has been no indication so far that Riyadh is overly concerned about prices. Indeed, according to analysts, cuts in crude prices [recently] announced by Saudi Aramco suggest that Riyadh is currently more preoccupied with market share than with outright crude price levels.’
Since January 2012 OPEC has an official output ceiling of 30mn b/d with no individual country quotas. Effectively, this put Saudi Arabia, the only member country with substantial surplus production capacity, in the lead of managing output. The group is next scheduled to meet on 27 November 2014 in Vienna.
News Item details
Journal title: Petroleum Review
Keywords: OPEC Quotas
Countries: Worldwide -
Organisation: OPEC
Subjects: Exploration and production
