33.3mbpd sees OPEC pro­duc­tion hit­ting new high in Oc­to­ber

Business a.m. - - ENERGY, POWER & RENEWABLES - Sto­ries by Bukola Od­u­fade

THE ORGANISA TION OF PETRO LEUM EX­PORT ING Coun­tries’ (OPEC) crude oil pro­duc­tion climbed to a new high of 33.33 mil­lion bar­rels per day in Oc­to­ber as in­creases by Saudi Ara­bia and Libya off­set losses stem­ming from im­pend­ing U.S. sanc­tions on Iran, ac­cord­ing to a Bloomberg sur­vey of of­fi­cials, an­a­lysts and ship­track­ing data.

The car­tel boosted its out­put by 430,000 bar­rels per day, its high­est since Novem­ber 2016, just be­fore the or­ga­ni­za­tion im­ple­mented pro­duc­tion cuts to clear a global glut.

Saudi Ara­bia, OPEC’s big- gest and most in­flu­en­tial mem­ber, in­creased out­put by 150,000 bar­rels per day to 10.68 mil­lion bar­rels per day last month, the high­est in the Bloomberg data go­ing back to 1962. That’s still below the king­dom’s own es­ti­mate of its record out­put, at 10.72 mil­lion bar­rels per day in Novem­ber 2016.

An even larger gain was seen last month in Libya, which has over­come po­lit­i­cal feuds and ter­ror­ist at­tacks to reach the high­est out­put level since 2013. The North African na­tion in­creased by 170,000 bar­rels per day to 1.22 mil­lion bar­rels per day.

Iran, which has seen many buy­ers flee as U.S. sanc­tions neared, con­tin­ued to de­cline and is pro­duc­ing the least crude since 2016. It slipped by a fur­ther 10,000 bar­rels per day to 3.42 mil­lion bar­rels per day in Oc­to­ber, though es­ti­mates for Septem­ber were re­vised higher. Top im­porters of Ira­nian oil, in­clud­ing In­dia, China and Tur­key, could not slash their pur­chases to zero with­out in­cur­ring a sig­nif­i­cant eco­nomic cost. The U.S. pressed these coun­tries, but ul­ti­mately had to back down. “We want to achieve max­i­mum pres­sure but we don’t want to harm frien ds and al­lies ei­ther,” U.S. na­tional se­cu­rity ad­viser John Bolton said.

The United States is poised to grant waivers to sev­eral coun­tries that are un­able to cut their im­ports of Ira­nian oil to zero, de­spite the hard stance of zero im­ports. OPEC’s ma­jor ally Rus­sia, is also ramp­ing up again. It hiked pro­duc­tion of crude and con­den­sates to a record of al­most 11.41 mil­lion bar­rels per day in Oc­to­ber, ac­cord­ing to an undis­closed govern­ment of­fi­cial.

The group is cur­rently in its “pro­duce as much as you can mode,” after it re­versed sup­ply cut poli­cies com­pletely, as Amer­i­can sanc­tions against Iran, which take ef­fect this week­end, are fan­ning con­cerns that a short­age could de­velop be­fore the end of the year.

While the pro­ducer group and its part­ners are boost­ing sup­ply now, the out­look for next year is grow­ing in­creas­ingly un­cer­tain. Also, OPEC com­mit­tee sig­naled that pro­duc­ers might need to re­strain out­put in 2019 as faltering eco­nomic growth, es­pe­cially in emerg­ing mar­kets, weak­ens de­mand for fu­els.

On the other hand, U.S. shale pro­duc­tion is con­tin­u­ing to surge as price gains from ear­lier this year en­er­gize shale-oil drillers, threat­en­ing to un­leash a new sur­plus. In Au­gust, the coun­try over­took Rus­sia as the world’s big­gest pro­ducer, pump­ing a record 11.35 mil­lion bar­rels per day, data from the En­ergy In­for­ma­tion Ad­min­is­tra­tion (EIA) showed.

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