OPEC Output Up in Aug; Iraqi Production Tops 1 Million b/d

OPEC's eleven members pumped an average 26.87-million barrels per day (mil b/d) of crude in August, up a net 270,000 b/d on July's 26.6-mil b/d, a Platts survey of OPEC and oil industry officials showed Sep 10.

The increase in overall production was largely the result of a 350,000 b/d output boost from Iraq, whose production climbed above the 1-mil b/d mark for the first time since the US-led war earlier this year.

Excluding Iraq, however, production from the ten members with quotas fell by 80,000 b/d to 25.84-mil b/d from 25.92-mil b/d in July.

The OPEC-10 exceeded their 25.4-mil b/d ceiling by 440,000 b/d. Indonesia underproduced its quota by 317,000 b/d and Venezuela underproduced its quota by 363,000 b/d. But these losses were more than made up by the other members, notably Saudi Arabia which exceeded its OPEC quota 394,000 b/d although its actual production fell by 10,000 b/d over the month from 8.66-mil b/d in July to 8.65-mil b/d in August.

"What's noteworthy about these numbers is that even in a time of high prices, OPEC sees a different world," said John Kingston, global director of oil at Platts. "Just this week, the International Energy Agency said its projections for the amount of OPEC oil that is going to be needed the rest of this year, and next year, is actually going to decline from earlier projections. OPEC sees that, and sees the gradual increase in Iraqi output, and given that combination, it's easy to see why the group has no plans to increase output at its coming meeting, despite the calls by many leaders for the group to do so."

Output increases totaling 400,000 b/d-including Iraq's 350,000 b/d-were partly offset by 130,000 b/d in reductions.

The biggest single cut came from Kuwait, whose output dropped by 60,000 b/d to 2.13-mil b/d in August. Iranian production fell from 3.79-mil b/d in July to 3.76-mil b/d in August. Venezuelan production eased further, the survey showed, from 2.58-mil b/d in July to 2.66-mil b/d in August. These levels are well below those claimed by the Venezuelan government.

Apart from Iraq, the only increases month-on-month came from Nigeria and Qatar, which boosted output by 10,000 b/d each to 2.16-mil b/d in the case of Nigeria and 740,000 b/d in the case of Qatar. UAE production rose from 2.24-mil b/d in July to 2.27-mil b/d in August.

Senior Iraqi oil officials said in Dubai this week that Iraq's output capacity currently stood at around 2-mil b/d but that sabotage on both the main export pipeline from Kirkuk to Turkish Mediterranean port Ceyhan and on feeder lines linking into the main pipeline has resulted in roughly half of the 500,000 b/d of northern crude production being reinjected.