Business
OPEC Hikes Production By 80,000bpd
The Organisation of Petroleum Exporting Countries (OPEC) increased crude oil production by 80,000 barrels per day (bpd) to 28.47 million bpd in June.
Reports from Platt’s’ survey of OPEC members, oil industry officials and analysts, said June’s output recorded an increase over 28.39 million bpd in May.
According to the reports, production from the 11 OPEC members bound by quotas, not including Iraq, dimmed by 50,000 bpd to 26.04 million bpd in June from 25.99 million bpd in May.
“These members are fairly unspectacular but with volumes edging improved from the third consecutive month, they do suggest that OPEC’s big output cutting effort may have reached its limit”, said John Kingston, Platts global director of oil. “With prices now trending downward while OPEC output is heading the other direction, it may mean September’s meeting of group could find itself facing some tough decisions in its production level.
OPEC production had already risen, in April and May after falling steadily since August 2008, when total output including that of Indonesia which left the group at the end of last year, average 32.81 million bpd. Exchanging Indonesia production, the survey estimates showed total OPEC production falling by 3.2 million bpd since last August.
Output increases totally 160,000 bpd from Angola, Ecuador, Iran, Qatar, Saudi Arabia, the UAE, Venezuela and Iraq were offset by an 80,000 bpd drop in Nigerian volumes.
The June estimates for OPEC-11 output reduce the group’s level of compliance with the 4.2 million bpd in crude output cuts agreed late last year to 71.5 percent in March.
Before April, OPEC production had fallen steadily as the group responded to the plunge in oil demand caused by the global economic recession, although the OPEC-11 failed to bring their volumes down to the 24.845 million bpd target which came into effect on January 1 this year.
The latest estimates leave the OPEC-11 some 1.19 million bpd in excess of their target.
OPEC has not published individual country quotas under the 24-845 million bpd targets. These quotas have been on the broadly-upward trend since mid-February, and this may have encouraged leakage. For example, OPEC’s own basket of crude’s stood at $38.14 per barrel on February 19. On June 11, the basket reached $70.87 per barrel. Its highest level for this year so far.
Prices have since fallen back by several dollars with the OPEC basket standing at $61.11/6 on July 8. OPEC ministers have twice rubber stamped the December agreement, most recently at a May 28 meeting in Vienna. They are next scheduled to meet in September.
Some residents of Port Harcourt queuing to buy petroleum products at a filling station in the city. Photo: King Osila
