Platts Says OPEC Production Up as Iraq Continues Recovery

OPEC's eleven members, including Iraq, pumped an average 26.6-million barrels per day (mil b/d) in July, up 370,000 b/d from June's 26.23-mil b/d, a Platts survey of OPEC and oil industry officials showed Aug 8.

Excluding Iraq, the ten OPEC members with quotas produced an average 25.92-mil b/d, an increase of 150,000 b/d on their combined June output of 25.77-mil b/d, the survey showed.

The OPEC 10 exceeded their 25.4-mil b/d ceiling by 520,000 b/d. Three countries-Indonesia, the UAE and Venezuela-reduced output by a total 70,000 b/d.

Venezuelan production averaged 2.58-mil b/d, well below the country's 2.923-mil b/d quota and the 2.9-mil b/d it was pumping before a crippling oil strike several months ago that some analysts believe has permanently reduced Venezuela's output capacity. Indonesia, whose production has been declining, under-produced its quota by 317,000 b/d. Indonesia and Venezuela were the only countries to produce within their respective quotas in July.

Iran, Iraq, Kuwait, Nigeria and Saudi Arabia increased production by a collective 440,000 b/d. The biggest single output increase of 220,000 b/d came from Iraq, whose production rose to 680,000 b/d in July from 460,000 b/d in June. Iran boosted output from 3.69-mil b/d in June to 3.79-mil b/d in July. Nigerian production recovered further, to 2.15-mil b/d, after political unrest earlier in the year hit output.

Saudi Arabia increased output by 40,000 b/d to 8.66-mil b/d in July, leaving the kingdom some 400,000 b/d above its OPEC quota.

"With WTI around $32/bbl, Brent close to $30/bbl and the OPEC basket holding above $28/bbl, there is every incentive for OPEC countries to pump more," said John Kingston, global director of oil at Platts. "I would not be surprised if the August numbers turned out to be higher still."

OPEC's next meeting is scheduled for Sep 24 but the cartel in theory can increase production by 500,000 b/d without the need to meet if its crude basket stays above the upper limit of the $22-28/bbl target band for 20 consecutive trading days. The basket has been above $28/bbl since Aug 1 and if it stays above $28/bbl for 20 days OPEC's so-called price band mechanism will be triggered in late August.