Opec output up again; UAE reduction biggest
london — Opec oil output has risen for a fourth month in October, a Reuters survey found, as a restart of more Libyan installations and higher Iraqi exports offset full adherence by other members to an Opecled supply cut deal.
The 13-member Organization of the Petroleum Exporting Countries has pumped 24.59 million bpd on average in October, the survey found, up 210,000 bpd from September and a further boost from the three-decade low reached in June.
An increase in Opec supply and a new hit to demand as coronavirus cases rise have weighed on oil prices, which have fallen eight per cent in October to near $37 a barrel. This puts pressure on Opec and allies, known as Opec+, to postpone a planned January 2021 supply boost, some analysts say.
“Oil demand is currently not supportive,” said Stephen Brennock of broker PVM. “At the bare minimum, Opec+ will have to roll over its current production levels until the end of March,” he added.
Libya is one of the Opec members exempted from a deal by Opec+ to curb supply.
Another two million bpd increase is scheduled in January, although Saudi Arabia and Russia are in favour of continuing with the current cuts, Opec sources said.
Libya, Iraq
October’s increase means Opec is pumping about 2.2 million bpd more than June’s figure, which was the lowest since 1991.
Libyan production is rising after Eastern Libyan commander Khalifa Haftar said on September 18 his forces would lift their eight-month blockade of oil exports.
The survey found output increased by 250,000 bpd in October, a faster rebound than some analysts and Opec officials expected. The second-largest increase came from Iraq, which lifted exports from its southern terminals. Compliance was still almost 100 per cent, higher than Iraq managed in earlier Opec+ deals.
Top exporter Saudi Arabia kept output
steady, as did Kuwait, the survey found. There was little change in supply from Iran, which is also exempt from the Opec cut, after an increase in September in defiance of US sanctions. Exports have been slightly lower in October, the survey found.
Among the Opec members lowering output, the biggest reduction came from the UAE, which had pumped above its quota in August. Industry sources said the reduction suggests the UAE is still compensating for its August increase. —