Organization of the Petroleum Exporting Countries' (OPEC) crude oil production output averaged 29.28 million barrels per day (b/d) in May, up 70,000 b/d from an estimated 29.21 million b/d in April, according to a just-released Platts survey of OPEC and oil industry officials and analysts.
However, excluding Iraq, which does not participate in OPEC output agreements, output from the 11 members bound by quotas (OPEC-11) fell by 60,000 b/d to 26.83 million b/d from 26.89 million b/d in April, the survey showed.
"While OPEC-11 production fell in May, it resulted in only a marginal increase in compliance with the 4.2 million b/d in output cuts agreed in late 2008," said Kevin Saville, managing editor of Platts' Americas energy news desk. "This suggests that OPEC remains mostly unconcerned with overproducing its notional output target by almost 2 million b/d, particularly when prices are holding well into the $70s/barrel."
Overall, 180,000 b/d of increases from Iraq, Saudi Arabia, Kuwait and the United Arab Emirates (UAE) more than offset 110,000 b/d in declines from Angola, Iran, Nigeria and Venezuela.
Iraqi supply, which had fallen by 130,000 b/d in April as bad weather hit exports, recovered by the same volume in May to average 2.45 million b/d.
The latest estimates show that the OPEC-11 overproduced their now largely notional 24.845-million-b/d target by 1.985 million b/d.
This target, based on output cuts totaling 4.2 million b/d agreed in late 2008, has been in place since January 2009. Compliance, which peaked at close to 82% in March 2009, was relatively high initially, but diminished as oil prices rose. The latest estimates suggest an overall compliance rate of 52.7% in May, up from 51.3% in April.
Earlier on June 9, OPEC's Vienna secretariat lowered its forecast of the call on OPEC crude this year by 70,000 b/d to 28.77 million b/d, saying supply growth had "more than overwhelmed" growth in demand and that the market had "no room for additional supplies."
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