The Organization of the Petroleum Exporting Countries (OPEC) oil production declined by 130,000 barrels per day (bpd) to 30 million bpd in September, due mainly to lower volumes from Saudi Arabia and sabotage-hit Nigeria, a just-released Platts survey of OPEC and oil industry officials and analysts showed.
The drops in Saudi and Nigerian output, along with other small dips in the United Arab Emirates, Kuwait and Iran, more than offset increases totaling 150,000 bpd from Angola, Libya and Iraq.
Reduced use of crude in power generation was offered as one reason for the lower estimates of Saudi production. However, given the recent downtrend in crude prices and expectations that Libyan production will ramp up, some participants suggested that Saudi Arabia's October output might see a further dip.
"The main factor to watch in the next few months is just how much Libyan crude comes back on the market, and whether other producers need to make way for it," said John Kingston, Platts global director of news. "Long-term, there's one thing to note: there are a few examples of oil-exporting countries that have gone through enormous change recently – Iran, Iraq, Nigeria and Venezuela – and had their production return to pre-turmoil levels. Libya would be challenging the odds to get back to its original 1.6-million-bpd production level."
Libya's current production is estimated at around 350,000 bpd following the resumption of output in recent weeks from a handful of fields. These include the fields operated by Benghazi-based Agoco, the Al-Jurf offshore field operated jointly by France's Total and the National Oil Corporation, and the Abu Attifel field operated by the Mellitah Oil Company joint venture with Italy's Eni.
The Platts survey pegged Libya's average September production at 90,000 bpd, which represents a month-on-month increase of 70,000 bpd.
Oil prices have declined recently from the 2011 peaks seen in April. Brent crude oil futures prices settled below $100 per barrel the week that ended October 7 for the first time since February as concerns about the global economy in general and the Eurozone area in particular cast a shadow over oil markets.
OPEC, following an impasse at its June 8 meeting, currently has no agreement on output levels. OPEC kingpin Saudi Arabia, which wanted the organization to increase actual production by 1.5 million bpd in June, sees the previous agreement as redundant. Iranian officials, however, continue to refer to the previous agreement as the basis for any future decisions on output.
That pact, based on 4.2 million bpd of output cuts which came into effect in January 2009, set a target of 24.845 million bpd for the 11 members bound by quotas (OPEC- 11). Iraq does not have a quota.
The oil-producing organization is scheduled to meet next on December 14 in Vienna when it will again address production policy.
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