OPEC Reaches 'Highest Level in More Than 2 Years'

Organization of the Petroleum Exporting Countries' (OPEC) crude oil production averaged 29.57 million barrels per day (b/d) in January, up 300,000 b/d from December and the highest level in more than two years, according to a just-released Platts survey of OPEC and oil industry officials and analysts. The month-on-month gain from December's estimated 29.27 million b/d came as a result of a significant boost in Iraqi crude exports.

Excluding Iraq, which does not participate in OPEC output agreements, the 11 members bound by quotas (OPEC-11) pumped an average 26.91 million b/d, up 70,000 b/d from December's 26.84 million b/d, the survey found. The OPEC-11 has operated under a 24.845 million b/d production target that's been in place since January 2009.

"The numbers out of Iraq are lending support to the declarations by BP that it is significantly increasing output at the Rumaila field," said John Kingston, Platts global director of news. "But it's not just that field, where production is said to be up by 150,000 b/d. The increase since August is more than 300,000 b/d, showing a more broad-based growth than just Rumaila."

Declines of 40,000 b/d and 20,000 b/d in Iranian and Nigerian production volumes partly offset increases totalling 130,000 b/d from Angola, Kuwait, Saudi Arabia, the United Arab Emirates (UAE) and Venezuela.

The latest increase in OPEC-11 volumes putsproduction 2.065 million b/d beyond the target and reduces compliance with the 4.2 million b/d of output cuts agreed in late 2008 to 50.8% from 52.5% in December.

OPEC production has been climbing in recent months alongside rising oil prices, which earlier this month climbed above $100 per barrel for the first time in two years and last week pushed above $103 per barrel as political unrest in Egypt escalated.

The group's most powerful producer, Saudi Arabia, boosted output to 8.4 million b/d in January after a 130,000 b/d hike to 8.35 million b/d in December, well above its notional quota of just above 8 million b/d.

At present, it remains unclear whether higher production volumes from Saudi Arabia have been exported or used internally where power station demand has been high.

On February 7, a senior Gulf source said Saudi Arabia was ready to supply more oil to the market but only if there was demand from its customers. This source said the market currently was in "good shape" and that the recent spike in global oil prices to their highest levels in 28 months had not been driven by supply/demand fundamentals.

Brent crude futures have risen by as much as $13 per barrel since OPEC's December meeting in Ecuador, but top OPEC officials have insisted that this has had little to do with supply or demand factors.

OPEC's current president, Iranian oil minister Masoud Mirkazemi, said last weekend that he saw no need for OPEC to call an extraordinary meeting, prior to the next scheduled meeting in Vienna in June, even if the oil price were to rise to $120 per barrel. He said he had received no requests from members for a special meeting.

But the Gulf source said on February 7 that Saudi Arabia was keen to hold informal consultations with other OPEC members on the sidelines of the upcoming February 22 ministerial meeting in Riyadh of the International Energy Forum.

Platts' survey data shows that Iraq production, at 2.66 million b/d, was the highest output level since November 2001, when volumes were estimated at 2.8 million b/d. Exports were up by more than 200,000 b/d, reflecting rising production as a result of field work by international oil companies. In particular, the increases are attributed to higher output from the giant Rumaila field, which is being developed by BP and China's CNPC, and the Zubair field, being developed by a consortium led by Italy's Eni.


Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Senior Financial Analyst Job
Expertise: Accounting|Financial Analyst
Location: Denver, CO
Manager - Financial Reporting
Expertise: Accounting|Financial Analyst
Location: Houston, TX
JIB Supervisor
Expertise: Accounting
Location: Houston, TX
search for more jobs

Brent Crude Oil : $49.98/BBL 1.59%
Light Crude Oil : $49.18/BBL 1.56%
Natural Gas : $2.73/MMBtu 1.44%
Updated in last 24 hours