OPEC output up in May as Nigeria, Libya increase production

OPEC output

Overall OPEC output increased in May, despite high compliance from OPEC supply cut pact participants. Anadarko photo by Mike Goldwater.

OPEC output up for the first time this year

A survey by Reuters showed OPEC output increased in May as Nigeria and Libya, two countries exempt from the cartel’s supply cut pact, boosted their production.

The output gains by the two African nations offset other cartel countries’ improved compliance with the OPEC supply cut agreement which calls for members to cut production by 1.2 million barrels per day (b/d).

The report showed a drop in output in Angola and Iraq along with high compliance from Gulf producers, including Saudi Arabia and Kuwait.  In May, compliance with the agreement was at 95 per cent, up from 90 per cent in April.

Oil prices have recovered slightly from losses last week when OPEC announced it would continue the pact into the first quarter of 2018.  Many analysts had hoped the cartel would increase the production cut and when that did not happen, prices fell around 5 per cent and have since recovered slightly.

Increasing production from Nigeria and Libya will put further pressure on prices.

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The two countries were exempted from the agreement because their output had been hampered by unrest.  However, in May, production in both nations partially recovered, lifting overall OPEC output by 250,000 b/d to 32.22 million b/d.

Angola showed a large decline in May due to fewer scheduled exports after a jump in April.  As well, Iraq exported slightly less oil from its southern terminals, according to the survey.

In May, Saudi Arabia pumped more crude, but its compliance was the second-highest among OPEC members.  This month, Saudi Arabia reduced its production by 564,000 b/d, well above its target of 486,000 b/d.

Iran and United Arab Emirates maintained steady output.  Iran was granted a small increase in its output by OPEC as the country sold oil it held in floating storage.

The survey showed the UAE had lower compliance with the pact.  According to Reuters, the gap is explained by the difference in the country’s own figures versus those estimated by secondary sources that OPEC uses to track compliance.

The Reuters survey is based on shipping data provided by external sources, Thomson Reuters flows data and information provided by sources at oil companies, OPEC and consulting firms.

 

 

 

 

 

 

 

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