The Organization of the Petroleum Exporting Countries (OPEC) increased crude oil production by 80,000 barrels per day (b/d) to 28.47 million b/d in June, according to a just-released Platts survey of OPEC members, oil industry officials and analysts. This is an increase from 28.39 million b/d in May.
Production from the 11 OPEC members bound by quotas, not including Iraq, climbed by 50,000 b/d to 26.04 million b/d in June from 25.99 million b/d in May, the survey showed.
"These numbers are fairly unspectacular but, with volumes edging upward for the third consecutive month, they do suggest that OPEC's big output cutting effort may have reached its limit," said John Kingston, Platts global director of oil. "With prices now trending downward while OPEC output is heading the other direction, it may mean September's meeting of the group could find itself facing some tough decisions on its production level."
OPEC production had already risen in April and May after falling steadily since August 2008, when total output, including that of Indonesia which left the group at the end of last year, averaged 32.81 million b/d. Excluding Indonesian production, the survey estimates show total OPEC production falling by 3.2 million b/d since last August.
Output increases totalling 160,000 b/d from Angola, Ecuador, Iran, Qatar, Saudi Arabia, the UAE, Venezuela and Iraq were offset by an 80,000 b/d drop in Nigerian volumes.
The June estimates for OPEC-11 output reduce the group's level of compliance with the 4.2 million b/d in crude output cuts agreed late last year to 71.5% from 72% in May, 78.7% in April and 81.8% in March.
Before April, OPEC production had fallen steadily as the group responded to the plunge in oil demand caused by the global economic recession, although the OPEC-11 failed to bring their volumes down to the 24.845 million b/d target which came into effect on January 1 this year.
The latest estimates leave the OPEC-11 some 1.19 million b/d in excess of their target.
OPEC has not published individual country quotas under the 24.845 million b/d target. These quotas have been calculated by Platts.
Crude futures prices have been on a broadly-upward trend since mid-February, and this may have encouraged leakage. For example, OPEC's own basket of crudes stood at $38.14/barrel on February 19. On June 11, the basket reached $70.87/b, its highest level for this year so far. Prices have since fallen back by several dollars with the OPEC basket standing at $61.11/b on July 8.
OPEC ministers have twice rubber-stamped the December agreement, most recently at a May 28 meeting in Vienna. They are next scheduled to meet in September.
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