Crude oil output from the Organization of the Petroleum Exporting Countries (OPEC) climbed by 400,000 barrels per day (bpd) to 31.27 million bpd in February from 30.87 million bpd in January, the highest volume from the 12 producing countries since the autumn of 2008, a Platts survey of OPEC and oil industry officials and analysts showed Wednesday.
Continuing recovery in Libyan production accounted for 250,000 bpd of the month-on-month increase. Smaller increments came from Angola, Kuwait, Nigeria, Saudi Arabia and Venezuela.
"What's fascinating about these numbers is that they are so much above what the International Energy Agency has said is necessary for OPEC to produce to keep inventories flat – what's known as the OPEC 'call,'" said John Kingston, Platts global director of oil. "For all of 2012, the call is 29.9 million bpd. Instead, OPEC is producing well over a million barrels per day above that, yet oil prices continue to climb."
Output dipped slightly in Iran, Iraq and the UAE.
"What you don't see in these OPEC numbers, however, are all the production drops in non-OPEC countries, admittedly small, but in places like Syria, South Sudan and Yemen. These are adding up and tightening the market," noted Kingston.
A European Union (EU) embargo on Iranian oil is due to come into force on July 1, giving refiners several months to seek alternative supplies. But non-EU countries which have been big buyers of Iranian crude have also shown interest in diversifying their supplies, partly from concern about similar U.S. sanctions.
The survey shows that the group overproduced its 30-million-bpd output ceiling by 1.27 million bpd. This output agreement established in December and does not set individual country quotas.
OPEC production has been steadily ramping up alongside climbing crude prices, which saw North Sea Brent crude oil last settle below the $100-per-barrel level on October 4 last year. The 2011 average close for front-month Brent price was $110.91 per barrel.
North Sea Brent crude oil futures traded at $128.40 per barrel on March 1. This is the highest traded price seen since July 23, 2008 – the same month which saw U.S. light crude futures prices trade at all-time highs of more than $147 per barrel.
Collective production from OPEC's current 12 members averaged 31.41 million bpd in October 2008, down from 31.61 million bpd in September and from 31.93 million bpd in August that year.
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