OPEC Output Up 250,000 Barrels Per Day in May
OPEC's eleven members, including Iraq, pumped an average 26.61-mil b/d in May, up 250,000 b/d from April's 26.36-mil b/d, a Platts survey of OPEC and oil industry officials showed Jun 5. Platts is the global energy information, research, consulting and media and marketing services division of The McGraw-Hill Companies.
Excluding Iraq, whose output was estimated to have risen from 50,000 b/d in April to 260,000 b/d in May, the survey showed that the ten members with quotas produced 26.35-mil b/d to exceed their official 24.5-mil b/d ceiling by 1.85-mil b/d.
These ten will have to reduce output by 950,000 b/d to meet their new, higher ceiling of 25.4-mil b/d which came into effect Jun 1. When OPEC agreed the higher ceiling at an Apr 24 "consultative" conference, it said that although official quotas were being raised, actual production would fall.
But the survey showed that most countries increased output in May. Saudi Arabia was the only member to reduce production, albeit by only 100,000 b/d.
Riyadh pumped an average 9.1-mil b/d in May, which means it will have to slash output by a further 844,000 b/d in June to meet its new 8.256-mil b/d quota.
Only three members produced within their quotas in May -- Indonesia, Nigeria, and Venezuela. Indonesia's output is declining, while production levels in Nigeria and Venezuela have been affected in recent months by ethnic unrest and strike action.
"Instead of reining in overproduction towards their new quotas, most OPEC countries have actually increased production. With WTI around $30/bbl and Brent around $27/bbl, there has been little incentive for them to cut back," said John Kingston, global director of oil at Platts. "Some OPEC officials have talked about cutting official quota levels at the June 11 meeting in Doha, Qatar. But that looks unlikely now."
Iraq, working to boost production after the US-led war, produced an average 260,000 b/d in May, according to the survey. The country's de facto oil minister Thamir Ghadban said earlier this week that output had risen to around 750,000 b/d and was expected to reach 1.5-mil b/d by mid-June.
OPEC's crude basket stood at $26.72/bbl Jun 4.
Earlier Jun 5, Iraq's State Oil Marketing Organization issued a tender for the sale of 12-mil barrels of crude stored at Ceyhan in Turkey and at Iraq's southern port Mina al-Bakr.
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