OPEC’s oil output set another record high in November ahead of a deal to cut production, a Reuters survey found on Monday, helped by higher Iraqi exports and extra barrels from two nations exempted from cutting supply – Nigeria and Libya.
The latest rise in supply means the Organization of the Petroleum Exporting Countries will have a bigger task in complying with a plan to cut supply starting in 2017 – its first production-reduction deal since 2008.
Supply from OPEC increased to 34.19 million barrels per day (bpd) in November from 33.82 million bpd in October, according to the survey based on shipping data and information from industry sources.
Brent crude LCOc1 rose above $55 a barrel on Monday, trading at a 16-month high, on prospects of a tighter market next year following OPEC’s deal. Prices are still half their level of mid-2014.
“OPEC’s decision to cut production has removed a lot of downside risk for 2017,” said Bjarne Schieldrop, chief commodities analyst at SEB, even though “some cheating is a natural habit among OPEC’s members”.
Based on the November survey, OPEC is pumping 1.69 million bpd above the 32.50 million bpd production target that it agreed last week to adopt from January 2017, following an outline agreement reached in September.
Supply has risen since OPEC in 2014 dropped its historic role of fixing output to prop up prices as Saudi Arabia, Iraq and Iran pumped more. Production also climbed due to the return of Indonesia in 2015 and Gabon in July as members.
November’s supply from OPEC excluding Gabon and Indonesia, at 33.23 million bpd, is the highest in Reuters survey records starting in 1997. At last week’s meeting, Indonesia suspended its membership again.
In November, Angola provided the largest supply boost as planned maintenance on the Dalia crude stream ended.
Output also climbed in Iraq due to record exports, lifting supply to 4.62 million bpd in November according to the survey. Iran, which was allowed to raise output under the OPEC deal as sanctions had crimped its supply, pumped 40,000 bpd more.
Indonesian output rose by 10,000 bpd.
Libya and Nigeria, both of which are exempt from the supply cut due to the impact on their output from conflict, boosted production in November.
Among countries with lower output, the biggest drop came from top exporter Saudi Arabia due to reduced crude use in power plants for air-conditioning, and lower refiner processing, sources in the survey estimated.
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.
Source: Reuters
