Tuesday 05 / November / 2024
London: Opec oil output has risen in June by 280,000 barrels per day (bpd) to a 2017 high, a Reuters survey found, as a further recovery in supply from the two member countries exempt from a production-cutting deal offset strong compliance by their peers.
High compliance by Gulf producers Saudi Arabia and Kuwait helped keep Opec's adherence with its supply curbs at a historically high 92 per cent in June, compared with 95 per cent in May, the survey found.
But extra oil from Nigeria and Libya, exempted from the cut because conflict curbed their output, means supply by the 13 Opec members originally part of the deal has risen far above their implied production target.
The recovery adds to the challenge the Opec-led effort to support the market is facing from a persistent inventory glut. If the recovery lasts, calls could grow within Opec for the exempt countries to be brought into the production deal.
"The rise in Opec production will further delay the point at which balance is restored on the oil market," said Carsten Fritsch, analyst at Commerzbank in Frankfurt.
As part of a deal with Russia and other non-members, the Organisation of the Petroleum Exporting Countries (Opec) originally pledged to reduce output by about 1.2 million bpd for six months from Jan. 1.
Oil prices have gained some ground but high stocks and rising US output kept them in check. To provide additional support for prices, the producers decided in May to prolong the deal until March 2018.
June's biggest rise came from Nigeria, where output extended a recovery after being curtailed by militant attacks on oil installations. The second-biggest was from Libya.
Nigerian output is expected to rise further in coming weeks. Planned exports in August are scheduled to reach at least 2 million bpd, a 17-month high.
In Libya, output was on average higher despite fluctuation and has now exceeded 1 million bpd, a four-year high. Production remains some way short of the 1.6 million bpd Libya pumped before the 2011 civil war.
Saudi Arabia pumped 40,000 bpd more, the survey found, although its compliance remained above 100 per cent. Even with June's increase, the curb achieved by Opec's top producer is 564,000 bpd, well above the target cut of 486,000 bpd.
Aside from a rise in Angolan exports, no other significant change in output occurred elsewhere in Opec.
Opec announced a production target of 32.5 million bpd last year, which was based on low figures for Libya and Nigeria. The target includes Indonesia, which has since left, and does not include Equatorial Guinea, the latest country to join Opec.
The Libyan and Nigerian increases mean Opec output in June averaged 32.57 million bpd, about 820,000 bpd above its supply target, adjusted to remove Indonesia and not including Equatorial Guinea.
Equatorial Guinea, which became an Opec member in late May, has now been added to the Reuters survey. The country's crude production is estimated at 150,000 bpd, which brings total Opec production in June to 32.72 million bpd.
