OPEC oil output up by 280,000 b/d
A study by Reuters found that in June, OPEC oil output was up by 280,000 barrels per day (b/d) and reached its highest point this year due to increased production from Libya and Nigeria.
The cartel’s increase occurred despite high compliance with the OPEC supply cut agreement by Saudi Arabia and Kuwait.
The Saudis did boost their production by 40,000 b/d, but its compliance remained above 100 per cent as the kingdom reduced its production by 564,000 b/d, well above its commitment to drop output by 486,000 b/d.
Overall in June, OPEC members reached 92 per cent adherence to the agreement, compared to 95 per cent in May, according to the survey.
Libyan production in June was over 1 million b/d, but remains short of the 1.6 million b/d Libya produced before the 2011 civil war. In August, Nigerian exports are expected to reach at least 2 million b/d, a 17-month high.
With the increases from Libya and Nigeria, OPEC’s output for June averaged 32.57 million b/d, above the cartel’s production target of 32.5 million b/d.
According to Reuters, if Nigerian and Libyan production continues to grow, there could be demand within OPEC for those exempted countries to be brought into the pact.
“The rise in OPEC production will further delay the point at which balance is restored on the oil market,” Carsten Fritsch, analyst at Commerzbank told Reuters.
The agreement was initially supposed to expire at the end of June, but high global crude stocks and increasing US production, the OPEC cuts had little impact on the global oil glut.
At the end of May, OPEC along with other participants including Russia, agreed to extend the deal to March 2018.
The Reuters survey is based on shipping data from external sources, Thomson Reuters flows data and information provided by sources at oil companies, OPEC and consulting firms.
