OPEC pumps 32.57 mil b/d in Oct, down 90,000 b/d from Sep

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  • Iraq oil output falls to six-month low on Kurdistan outages
  • Nigeria, Algeria, Venezuela also post steady declines
  • Saudi output rises to three-month high
  • OPEC compliance from Jan-Oct 106%

OPEC oil output in October fell 90,000 b/d from the previous month as declines were observed in six member countries, an S&P Global Platts survey of OPEC and oil industry officials and analysts showed Wednesday.

OPEC’s 14 members saw their collective October output fall to 32.57 million b/d from 32.66 million b/d in September, owing to sharp declines in Iraq and Nigeria, along with slight falls in Algeria, Venezuela, Iran and Qatar.

That is some 650,000 b/d above its declared ceiling of about 31.92 million b/d, when Equatorial Guinea, which joined in May, is added in and Indonesia, which suspended its membership from December 2016, is subtracted.

Steep falls in Iraq and Nigeria were the main two reasons for a decline in OPEC output, with Iraqi oil output falling to its lowest level since March 2016, taking the country just 3,000 b/d above its OPEC output quota of 4.351 million b/d.

Iraq produced an average of 4.38 million b/d of crude in October, a fall of 120,000 b/d from the previous month, as output from the fields controlled by the Kurdistan Regional Government fell sharply from October 17 onwards.

Production from the semi-autonomous Kurdistan region in Iraq dropped mid-month as Iraqi federal forces captured the key disputed Kirkuk fields, dragging pipeline exports to Ceyhan down significantly.

However, southern exports grew last month as production from central and southern Iraq was being directed to the Persian Gulf terminal.

Production in Nigeria fell 60,000 b/d to 1.78 million b/d last month as a shorter export program along with operational and loading delays have resulted in a deferral of several cargoes to November.

Nigerian production has recovered steadily this year but output could again be at risk after the Niger Delta Avengers militant group threatened to resume attacks on oil facilities.

Algerian oil output dropped 30,000 b/d to 1 million b/d last month as the El Merk oil field was under maintenance, and work is expected to last till end-November.

Meanwhile, Iran saw its output fall 20,000 b/d to 3.81 million b/d due to a dip in crude oil exports.

SAUDI, LIBYA, ANGOLA BUCK TREND

Saudi Arabia, which has been shouldering the burden of the OPEC cuts, saw its output rise 20,000 b/d to 10.02 million b/d, boosted by a sharp rise in crude oil exports despite lower direct crude burn, survey participants said.

Saudi output has averaged 9.979 million b/d over the first 10 months since the deal came into effect in January, 79,000 b/d below the country’s official allocation of 10.058 million b/d.

Crown Prince Mohammed bin Salman, the architect of the kingdom’s current policy, recently strengthened his hand, by leading an unprecedented government purge and detaining 11 high-ranking princes in an anti-corruption crackdown.

Angolan October output rose to 1.71 million b/d, its highest level in over a year on a lengthy export program.

Output was up 70,000 b/d month-on-month as exports and production of grades such as Cabinda, Dalia, CLOV increased steadily.

Libyan output rebounded to 980,000 b/d in October, a rise of 70,000 b/d from the previous month as production from key fields like Sharara ramped up.

But Libya’s ambitions to push output closer to its target of 1.25 million b/d by year-end look tricky, with technical and security problems across the country.

GEOPOLITICAL RISKS RETURN

There are enough encouraging signs to suggest OPEC and non-OPEC producers will extend their output cut deal beyond March 2018 as evidenced by positive statements by Prince Mohammed and even Russia’s President Vladimir Putin.

But the details of any deal, including its length, allocations or any other new terms, still remain to be negotiated before the coalition’s next meeting on November 30 in Vienna.

However, this upcoming meeting will be held against a different backdrop, one of rising geopolitical risks, higher oil prices and a stronger physical oil market as the rebalancing process seems to be in sight.

Some of these bullish factors on the market could encourage a sense of reluctance on the part of some countries to address an extension, especially if prices continue to edge higher ahead of November 30.

The Platts estimates were obtained by surveying OPEC and oil industry officials, traders and analysts, as well as reviewing proprietary shipping data.

 

 

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