Platts: OPEC Out Dips in August

OPEC crude production fell by 40,000 barrels per day (b/d) in August, to 30.46 million b/d from 30.5 million b/d in July, mainly because of lower exports from Iraq, a Platts survey showed September 7.

The ten members bound by production agreements, however, boosted output by 80,000 b/d, to 26.79 million b/d in August from 26.71 million b/d in July, the survey showed.

OPEC ministers meet in Vienna on September 11 to review the current agreement, which sets target output at 25.8 million b/d. Several ministers have said in the runup to the meeting that they do not see any need for the group to raise this target.

Actual OPEC-10 production has been steadily creeping up over the summer, however, and is now about a million barrels per day above the 25.8 million b/d target.

John Kingston, Global Director of Oil at Platts, said, "OPEC faces a real dilemma at its upcoming meeting. On the one hand, prices have climbed back up toward the $75 level, and the supply/demand balance projects a tight market in coming months, which might encourage OPEC to raise production. But when the organization looks at Friday's U.S. employment figures, and considers the ramifications of the US subprime mess, it will be concerned that a significant slowdown in demand could be around the corner. With that in mind, it is difficult to see a scenario in which it will vote to raise output, given that based on our survey, production is rising slightly regardless."

Apart from a small dip in Iranian production, the only significant decline came from Iraq. Iraqi exports had been boosted in July by the first liftings from Turkish Mediterranean port Ceyhan since January. There were no exports from Ceyhan in August, leaving Iraq to rely solely on its southern terminals. State oil marketer SOMO will sell 5 million barrels from Ceyhan in September, however, having built up stocks at the port.

Iraq, struggling to rebuild its oil industry after years of United Nations sanctions and a US-led war in 2003, does not participate in OPEC output pacts. Angola, which became a member in January this year, has yet to join the quota system.

    Country      August    July    June      May      April     Cut
    Algeria      1.360    1.350    1.350    1.350     1.330    0.084
    Indonesia    0.830    0.830    0.830    0.840     0.840    0.055
    Iran         3.880    3.900    3.880    3.850     3.800    0.249
    Kuwait       2.420    2.420    2.420    2.420     2.410    0.142
    Libya        1.690    1.680    1.680    1.680     1.680    0.102
    Nigeria      2.150    2.150    2.080    2.050  2.200    0.142
    Qatar        0.810    0.810    0.800    0.800     0.790    0.050
    Saudi Arabia 8.660    8.610    8.610    8.610     8.600    0.538
    UAE          2.590    2.560    2.550    2.540     2.500    0.143
    Venezuela    2.400    2.400    2.400    2.420     2.420    0.195
    OPEC-10     26.790   26.710   26.600   26.560 26.570    1.700
    Angola*      1.680    1.670    1.640    1.630     1.580     N/A
    Iraq         1.990    2.120    1.980    2.020     2.040     N/A
    Total       30.460   30.500   30.220   30.210 30.190
    * Angola joined OPEC on January 1, 2007. ( R ) means revised.

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