The Organization of the Petroleum Exporting Countries (OPEC) crude oil production averaged 28.89 million barrels per day (b/d) in October, up 60,000 b/d from September's 28.83 million b/d, a Platts survey of OPEC and oil industry sources and analysts showed Thursday.
"OPEC appears to have tied its output policy more or less directly to developments in the world economy. While actual output has been increasing steadily, the group seems reluctant to legitimize its overproduction by raising official quotas given that consumer stocks are at historically high levels and its own less than optimistic view of fundamentals," said John Kingston, Platts global director of oil.
"At the same time, possibly for fear of putting pressure on the nascent economic recovery, OPEC has refrained from encouraging members to improve their levels of discipline by reining in overproduction towards the target level. Any dramatic movement in the oil price could force its hand, but for the time being OPEC seems able and happy enough to ignore the big gap between nominal and actual output," added Kingston.
Excluding Iraq, which does not participate in OPEC output agreements, production from the 11 members bound by quotas (OPEC-11) rose by 70,000 b/d to 26.4 million b/d in October from 26.33 million b/d in September.
Increases totalling 90,000 b/d from Angola, Nigeria, Saudi Arabia and the United Arab Emirates (UAE) were partly offset by decreases from Iran, Libya and Iraq of 30,000 b/d.
The latest estimates leave the OPEC-11 overproducing their 24.845 million b/d output target by nearly 1.56 million b/d.
Compliance with the 4.2 million b/d of cuts agreed late last year has been declining since April alongside a broad firming of oil prices. Having peaked at close to 82% in March, compliance fell to just under 63% in October.
In September, OPEC rolled over its official output target for the third time this year, saying that although the outlook for fundamentals was gloomy, it did not want to take any action on production that might endanger global economic recovery.
Latest soundings from OPEC officials suggest an ongoing reluctance to increase official targets despite the continuing rise in actual output. UAE oil minister Mohammed bin Dhaen al-Hamli was quoted last weekend as saying that raising official targets was not on OPEC's agenda for the December 22 meeting in Luanda, Angola.
Platts, a division of The McGraw-Hill Companies, is a leading global provider of energy and commodities information.
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