LONDON: Opec’s oil production rose in July from June, a survey found yesterday, as a fragile recovery in Libyan supply outweighed fighting in Iraq and reduced output from Angola.
Despite the increase, unrest in Africa and the Middle East is still weighing on supply. That could hinder Opec’s ability to boost output later in the year, when the International Energy Agency expects demand for Opec crude to rise. Supply from the Organisation of the Petroleum Exporting Countries has averaged 30.06 million barrels per day (bpd) in July, up from 29.92 million bpd in June, according to the survey based on shipping data and information from sources at oil companies, Opec and consultants.
This puts Opec’s output close to the group’s nominal target of 30 million bpd. Outages in the group, such as in Iraq and Libya, are effectively helping Opec to balance the market, rather than voluntary cutbacks, say analysts.
“Opec seems to be in control of its production at the moment, probably due to the external events,” said Eugen Weinberg, commodities analyst at Commerzbank in Frankfurt.
The 12-member Opec pumps a third of the world’s oil. In July, the largest increase has come from Libya, where supply rose by 210,000 bpd to 430,000 bpd, the survey found.
Still, a reversal of the rising production trend in the last few days, as well as battles between rival militias in the capital Tripoli and fighting in Benghazi, Libya’s second city, put the extent of the recovery in doubt.
“The problem with Libyan production is it is one step forward, one step back. The situation is quite unstable,” Commerzbank’s Weinberg said.
Top exporter Saudi Arabia raised supply modestly, in part because of a greater need for crude in domestic power plants, industry sources said. Some sources said exports had increased.
Nigerian output also edged higher in July, according to export schedules and crude buyers.
Of the countries with falling output, Iraq’s supply declined by 70,000 bpd, as domestic crude use fell because of the closure of the Baiji refinery, which was attacked by militants in June.
Supply of Iraqi crude to world markets increased as exports from Iraq’s southern terminals rose to more than 2.5 million bpd from 2.42 million bpd in June, when technical issues slowed down shipments, according to shipping data. Total estimated Iraqi production in June was revised higher to 3.15 million bpd because production in Iraq’s Kurdistan region was higher than previously thought.
Iranian output slipped in July, the survey found, reflecting a lower export schedule for the month. Exports had been rising since late 2013 following a softening of Western sanctions on Iran over its nuclear work.