OPEC Output Up 730,000 Barrels Per Day in July

OPEC's eleven members, including Iraq, pumped an average 29.67 million barrels per day (mil b/d) of crude in July, 730,000 b/d higher than June's 28.94-mil b/d, a Platts survey of OPEC and oil industry officials showed August 10.

Excluding Iraq, which does not participate in OPEC production accords, the ten members with output quotas produced an average 27.72-mil b/d, an increase of 480,000 b/d from their June average of 27.24-mil b/d and more than 1.7-mil b/d in excess of the 26-mil b/d official output ceiling which came into effect at the beginning of August.

"Now the focus turns from what the countries are producing relative to their quota and moves to what they are producing relative to their capacity," said John Kingston, global director of oil at Platts. "A few hundred thousand barrels per day might be carved out here and there from countries other than Saudi Arabia, but it's Riyadh that will make the difference."

The biggest single increase-300,000 b/d-came from Saudi Arabia which boosted its output to 9.4-mil b/d in July from 9.1-mil b/d in June. The Saudis have pledged to increase production to their full capacity of 10.5-mil b/d- which they say can be reached quickly-if this proves necessary.

"Estimates of Saudi spare capacity have been put as low as 500,000 b/d and as much as 1.5 to 2-million b/d," Kingston said. "Whatever the level, the fact is that the world's capacity to produce oil is being asked for a yield that it has probably never seen. And with disruptions this week in Iraq, possible turmoil in Venezuela this weekend during the Chavez recall vote and the normal crises that have beset oil for many months, the market is living on the edge. It will take a downturn in demand - and that generally only occurs with a weak global economy -- to put a little more flexibility into a very tightly drawn rubber band."

Iraqi production recovered to 1.95-mil b/d in July after sabotage on southern pipelines sent output falling to 1.7-mil b/d in June from 1.9-mil b/d in May.

Only Indonesia, whose crude output is currently in decline, saw production fall. Kuwait, Nigeria and Qatar maintained production at June levels. Other countries increased output by between 10,000 b/d and 60,000 b/d.

Country-by-country breakdown of production with figures in millions of b/d:

     Country      July 04  June 04  May 04  Apr 04  Quota-  Quota-  Quota-
                                                    Apr 1   Jul 1   Aug 1

     Algeria       1.250    1.200   1.170   1.150   0.750   0.814   0.830
     Indonesia     0.960    0.970   0.970   0.980   1.218   1.322   1.347
     Iran          3.980    3.960   3.920   3.880   3.450   3.744   3.817
     Iraq          1.950    1.700   1.900   2.380   N/A     N/A     N/A
     Kuwait        2.350    2.350   2.300   2.210   1.886   2.046   2.087
     Libya         1.590    1.540   1.470   1.460   1.258   1.365   1.392
     Nigeria       2.400    2.400   2.350   2.350   1.936   2.101   2.142
     Qatar         0.780    0.780   0.760   0.740   0.609   0.661   0.674
     Saudi Arabia  9.400    9.100   8.600   8.300   7.638   8.288   8.450
     UAE           2.390    2.380   2.260   2.100   2.051   2.225   2.269
     Venezuela     2.620    2.560   2.560   2.520   2.704   2.934   2.992
     Total        29.670   28.940  28.260  28.070   N/A     N/A     N/A
     OPEC 10
      Iraq)       27.720   27.240  26.360  25.690  23.500  25.500  26.000