01/09/2017 08:54 AST

Organization of the Petroleum Exporting Countries (OPEC) output has fallen this month by 170,000 barrels per day (bpd) from a 2017 high, a Reuters survey found, as renewed unrest cut supplies in Libya and other members stepped up compliance with a production-cutting deal.

A dip in supply from top two producers Saudi Arabia and Iraq helped to boost OPEC’s adherence to its output curbs to 89 percent, up 5 percentage points from July but still short of the levels above 90 percent achieved earlier in the year.

The decline from Libya, and the lack of a further sizeable increase from Nigeria, will ease concerns that extra barrels from the two nations could swamp cutbacks made elsewhere. Libya and Nigeria were exempt from the cuts because conflict had curbed their production. “Libya’s production has dropped by more than 350,000 bpd this past week,” said Ole Hansen, a commodities analyst at Saxo Bank.

As part of a deal with Russia and other non-members, the OPEC is reducing output by about 1.2 million bpd from Jan. 1, 2017 until March next year.

High compliance and much-reduced output in the exempt countries pushed supply lower in early 2017. But extra Libyan and Nigerian production, and slipping adherence in some countries, prompted output to rise to a 2017 high last month.

To address this, ministers at a July 24 meeting moved to cap Nigerian output, although they stopped short of asking Libya to join the supply-cutting deal, and called on several members to boost compliance.

August’s biggest drop came from Libya, where output slipped to an average of 900,000 bpd as unrest forced the shutdown of the country’s largest oilfield, Sharara, plus other sites, putting a supply recovery on hold for now.

Top exporter Saudi Arabia trimmed supply because of lower exports, although this was offset by more crude use at home and exports rose in the latter part of the month. Saudi power plants burn more crude in the hot summer months for electricity to keep the population cool. “There have been strong exports in the last couple of days. We could potentially see exports only slightly down versus July,” said an industry source who tracks Saudi output.

Iraqi supply came in slightly lower than July because of a dip in exports from the south and north of the country — although Baghdad still has some way to go to match the compliance levels of other large producers.

Among countries with higher output, Angola exported more cargoes than in July and supply in Nigeria edged higher as Shell’s Nigerian venture lifted a force majeure on Bonny Light crude exports.

OPEC announced a production target of 32.50 million bpd last year, which was based on low figures for Libya and Nigeria. The target includes Indonesia, which has since left OPEC, and does not include Equatorial Guinea, the latest country to join OPEC.

According to the survey, output in August has averaged 32.68 million bpd, about 930,000 bpd above the target adjusted to remove Indonesia and not including Equatorial Guinea. With Equatorial Guinea added, total OPEC production in July totalled 32.83 million bpd, a drop of 170,000 bpd from July.

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.


Arab News

Ticker Price Volume
QNBK 123.01 258,855
SABIC 100.60 653,920
SALAMA 20.90 61,115
BURUJ 34.50 15,272
WALAA 26.80 7,281
TRADEUNION 21.04 18,985
SOLIDARITY 20.14 28,887
(In US Dollar) Change Change(%)
Brent 55.62 0.15 0.27
WTI 49.89 0.00 0.00
OPEC Basket 53.63 0.71 1.34
Oil prices rally on deeper OPEC cuts

20/09/2017

Short-term disruptions and lower exports from OPEC members offset signs of stronger US oil production to help give crude oil prices a lift early Tuesday.

Crude oil prices have been volatil

Saudi Gazette

Iraq Says OPEC Mulls Deeper, Longer Oil Cuts to End-2018

19/09/2017

Iraq and some other oil producers taking part in global output cuts think they should reduce supply by an additional 1 percent to help re-balance the market, according to Iraqi Oil Minister Jabbar al

Bloomberg

Oil near five-month high as Middle East producers stick to cuts

19/09/2017

Oil prices traded close to five-month highs on Tuesday after fresh data showed key Middle Eastern producers continued to cut supply in line with an OPEC-led deal aimed at ending a crude glut.

Reuters

Oil Holds Near $50 as Refiners Delay Work After Hurricane Harvey

19/09/2017

Oil held gains near $50 a barrel before U.S. crude stockpile data as refiners delay scheduled maintenance after Hurricane Harvey hit the Gulf Coast and shuttered almost a quarter of the nation’s refi

Bloomberg

Another Bullish Oil Sign

19/09/2017

West Texas Intermediate (WTI) and Brent oil prices have increased to $50 and $55, respectively, and bullish oil signs continue to accumulate. Joint Organisations Data Initiative (JODI) just announced

Seeking Alpha