OPEC crude output has fallen in June due to disruptions in Libya and Nigeria, a Reuters survey has found, inadvertently bringing supply closer to the organization’s target.
Supply from the Organization of the Petroleum Exporting Countries has averaged 30.38 million barrels per day (bpd), down from a revised 30.46 million bpd in May, the survey of shipping data and sources at oil firms, OPEC and consultants found.
The survey shows violence is making African producers OPEC’s weakest supply link and the ambitious plans of Iraq, its second-largest producer, to expand exports are facing headwinds.
In June, largely involuntary curbs by smaller OPEC producers have outweighed extra crude from its top exporter, Saudi Arabia, which has ramped up supply in response to a seasonally higher requirement for crude in domestic power plants.
“It’s Nigeria, Libya and Angola mainly,” said a participant in the survey who declined to be identified. “This decline should support prices and you could make a case for it continuing for the next few months.”
OPEC’s June output is the lowest since March 2013, when the group pumped 30.18 million bpd, according to Reuters surveys, and leaves supply a mere 380,000 bpd above its output target of 30 million bpd.
With oil just above Saudi Arabia’s preferred level of $ 100, OPEC at a meeting on May 31 in Vienna agreed to maintain the 30 million bpd target, leaving the door open for informal Saudi supply tweaks depending on demand.
The most notable drop in OPEC output has come from Libya.
Protests at oil fields and terminals led to supply falling below 1 million bpd earlier in June, according to the state oil company, although production recovered later in the month.
Supply in Nigeria, increasingly disrupted by oil spills, flooding and theft, remains under downward pressure. Output of Nigerian Usan crude, originally expected to amount to four cargoes in June, was offline for most of the month.
The Usan operator, Total, declared a force majeure on loadings which is still in place. Another Nigerian crude grade, Bonny Light, remains under force majeure.
Iraq’s exports have slipped to 2.35 million bpd so far in June due to poor weather disrupting loadings in the south and interruptions to pipeline flow in the north of the country, according to shipping data and industry sources.
Supply fell in Angola due to export scheduling. Shipments of grades including Saxi and Plutonio crude were lower than in May, when exports rose.
Iranian crude exports were estimated at around 1.1 million bpd in May and the survey found no significant change in June.
US and European sanctions on Iran have more than halved its exports since early 2012.
Meanwhile, global spare oil production capacity slipped in May and June from the previous two months, but was above levels during the same period last year, the US government has said.
The spare capacity slipped to 2.4 million barrels per day in May and June, down about 0.4 million bpd from the previous two months, but up 0.3 million bpd versus May and June last year, the Energy Information Administration report said.
Sam Napolitano, an EIA analyst, said the slip in spare capacity was mainly the result of adjustments in production from Saudi Arabia and other OPEC countries.
Global production of liquid fuels averaged 89.9 million barrels a day in May and June, up about 1 million bpd from the previous two months, which the EIA revised up 0.7 million bpd to 88.9 million bpd.
Global liquid fuels production outpaced consumption resulting in a 0.2 million bpd build in global oil stocks in May
and June. Part of the gains came as production rose in some non-OPEC countries, including the United States, Sudan and South Sudan, the report said.