of OPEC oil production come down from the peak of 2017

of OPEC oil production come down from the peak of 2017


OPEC's oil output fell 170,000 barrels per day this month to drop from a record high of 2017, as Libya's supplies fell due to renewed unrest and improved commitment by other members to a cut-off agreement, a Reuters survey showed.
Opec's commitment to output cuts has been boosted to 89 percent, up five percentage points from July as supply from Saudi Arabia and Iraq, OPEC's top producers, slumped, but compliance remained below levels earlier in the year when it was above 90 percent.
Libya's pullback and a halt to Nigeria's large increases will ease concerns that additional volumes from the two countries could overwhelm cuts elsewhere. Libya and Nigeria were exempted from cuts due to internal conflicts that curbed their production.
"Libya's production has dropped more than 350,000 bpd this past week," said Ole Hansen, commodities market analyst at Saxo Bank.
Under the deal with Russia and other non-Opec members, the Organization of the Petroleum Exporting Countries (OPEC) is cutting output by about 1.2 million bpd from January 1, 2017 to March next year.
The high level of commitment and the significant decline in the production of the two exempted countries pushed supplies down in early 2017. But the increase in Libyan and Nigerian production and the decline in compliance in some countries boosted production to the highest level in 2017 last month.
To address this, the ministers moved during a July 24 meeting to curb Nigerian production but did not submit Libya's demand to join the cut-off agreement and called on many members to strengthen the commitment.
The biggest drop in production came in August from Libya, with output falling to an average of 900,000 barrels a day, with unrest leading to the closure of Sharara, the country's largest oilfield, as well as other sites, halting the recovery of supplies.
Saudi Arabia, the biggest oil exporter, has cut supplies because of a drop in exports, but the impact has been dampened by increased domestic crude use and higher exports later in the month. Saudi power plants use more oil in hot summer months to generate electricity to meet the demand for air conditioning.
"There have been strong exports in the last couple of days and we may see slightly lower exports compared to July," said a sector source who oversees Saudi production.
Iraq's output fell slightly from its July level due to lower exports from the south and north of the country, but Baghdad is still far from matching levels of commitment to other major producers.
In the countries that have increased production, Angola exported more shipments compared with July and production in Nigeria rose with the lifting of the Shell project. There is force majeure in Bonny Light exports.
OPEC announced a production target of 32.5 million bpd last year on the basis of low figures in Libya and Nigeria, including Indonesia, which has since left the organization and does not include Equatorial Guinea, the latest accession to the Organization.
According to the survey, August production averaged 32.68 million bpd, up 930,000 bpd from the adjusted target level in view of Indonesia's exit and not Equatorial Guinea.
With the addition of Equatorial Guinea, OPEC's total production in August was 32.83 million bpd, down 170,000 bpd from July.
The Reuters survey is based on offshore data from offshore sources, flow data for Thomson Reuters and information from sources in oil companies, OPEC and consulting firms.

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