OPEC oil output falls on Libya unrest




 OPEC crude output declined in August as unrest and conflict in Libya disrupted supplies, a Reuters survey found, outweighing extra oil from Saudi Arabia and a recovery in Iraq.
Supply from the Organization of the Petroleum Exporting Countries has averaged 30.32 million barrels per day (bpd), down from a revised 30.50 million bpd in July, the survey of shipping data and sources at oil companies, OPEC and consultants found.
The survey also showed internal strife is undermining supply from African OPEC producers. The outages plus concern about a military strike against Syria pushed Brent crude to a six-month high above $117 a barrel this week.
“While Saudi Arabia may be stepping up production, the outage of Libyan crude oil alongside multiple declarations of force majeure on exports by fellow OPEC member Nigeria will remain supportive of Brent prices,” said Harry Tchilinguirian, head of commodity market strategy at BNP Paribas in London.
“The reason is because the crudes are of very similar quality to Brent and priced off the North Sea benchmark.”
In July, involuntary curbs in Libya and no significant recovery in Nigeria have outweighed extra crude from Saudi Arabia, and a rebound in Iraq’s exports.
With the upward revision to July, OPEC’s August output is the lowest since March 2013, when the group pumped 30.18 million bpd, according to Reuters surveys, and leaves supply a mere 320,000 bpd above its output target of 30 million bpd.
The most notable drop in OPEC output has come from Libya. Protests at oilfields and terminals have cut supply to a monthly average of 500,000 million bpd, according to the survey.
Output, at 1.4 million bpd earlier this year, had slumped to 250,000 bpd or lower by late August.
Supply in Nigeria, increasingly disrupted by oil spills and theft from pipelines, remains far below its potential with exports of crudes including Bonny Light under force majeure, even after a small rise in August.
Output fell slightly in Angola due to reduced production and a force majeure on exports of Saturno crude.
Iraq’s exports have rebounded due to increased shipments from southern ports. Iraq allocated extra oil to some customers, trade sources said, before an expected slowdown in September due to maintenance work.
An oil revival in Iraq after decades of sanctions and wars has slowed this year due to infrastructure and security problems. Iraq is at risk of its first annual drop in output for three years unless momentum is regained in the autumn.
Iranian supply to market was estimated at 2.68 million bpd, up slightly from July, on indications more crude may be heading to China and India. US and European sanctions on Iran have more than halved its exports since early 2012.
With Brent crude LCOc1 above the $100-mark favored by Saudi Arabia and most other members, OPEC at its last meeting held in May agreed to keep the output target of 30 million bpd.
The group is not scheduled to meet again until December and has effectively delegated short-term market management to Saudi Arabia, which tweaks supply informally depending on demand.


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