LONDON: Opec’s oil output has risen further in February from December’s two-and-a-half-year low, due to more shipments from Iraq and Angola, and further upward creep in Iranian exports, a Reuters survey found yesterday.
Output from the Organisation of the Petroleum Exporting Countries averaged 29.96 million barrels per day (b/d), up from a revised 29.79m b/d in January, according to the survey based on shipping data and information from sources at oil companies, Opec and consultants.
The survey illustrates the potential for Opec supply to rebound in 2014 if Iraq and Iran sustain higher output, potentially weighing on oil prices unless outages persist in Libya or top exporter Saudi Arabia cuts back.
“If Opec production is rising, this would only add to the existing over-supply,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt. He expects Brent crude to fall further towards the middle of its trading band of $100-110 a barrel over the next few weeks due to ample supplies.
In February, a jump in Iraqi exports, an increase in Angola and a further small rise in Iranian shipments outweighed reductions in Libya, Nigeria and Saudi Arabia.
Opec’s December output was the lowest since May 2011, when the group pumped 28.90m b/d, according to Reuters surveys. Despite increases this month and in January, supply is below Opec’s nominal target of 30m b/d for a fifth straight month.
The biggest increase came from Iraq, whose exports from its southern terminals jumped by more than 300,000 b/d as shipping delays caused by bad weather in January were cleared. Shipments of Kirkuk crude also increased from Iraq’s north.
Angola’s exports have increased in February, mainly as the shorter month lifted the daily rate. The increase is unlikely to last as maintenance at BP’s Plutonio oilfield is set to reduce exports in March.
Iranian supply to market was estimated at 2.82m b/d, up 70,000 b/d. The modest pickup is the fourth consecutive monthly rise, according to sources who track tanker movements, and adds to signs that the easing of sanctions on Tehran is helping it sell more crude.
The largest decline in Opec was from Libya, where output declined to 230,000 b/d by the end of the month from January’s average of 550,000 b/d because of strikes and protests.
Top oil exporter Saudi Arabia, industry sources say, trimmed output slightly. Saudi state oil company Saudi Aramco told some term buyers that it will supply less Arab Extra Light crude due to maintenance at one of its biggest oilfields, Shaybah.
“I think they are taking advantage of a seasonal slow period,” said an industry source of the timing of the maintenance. “They may re-jig production from other fields to keep pace with demand. If market demand is there, then they will supply it.”
Oil prices have been higher so far this year than predicted, as bearish forecasters focus on worries about future oversupply and faltering demand, Reuters data shows.
Forecasts of North Sea Brent crude oil futures prices in 2014 have been 3-4 percent below the 12-month moving average for actual prices over the last 18 months, and are still around $4 per barrel below the spot market.
Reuters surveys top oil analysts at more than 30 banks and other leading financial institutions every month for their expectations of the world’s crude oil benchmark.
Since estimates for this year were first gathered at the end of 2012, the Reuters monthly survey has forecast the average Brent price for 2014 between $103.50 and $109. The latest survey projected prices this year would average $105 per barrel.
The 2014 Brent forecast has tended to follow the average actual price over the previous 12 months minus a discount of 3.6 percent, or $3 to $4 per barrel.
So far this year, the average closing price for front-month Brent futures has been close to $108 per barrel. The Reuters data suggests oil analysts have tended to underestimate the loss of supply from key oil producers such as Libya, Iraq and Iran, and may have been too gloomy on the outlook for global oil consumption.
Oil dropped below $109 a barrel yesterday as tension in Ukraine dampened risk appetite and the United States revised its estimate for fourth quarter growth below analyst expectations.
A severe winter in the United States supported oil prices earlier this year, helping oil avoid the weakness of other risk assets such as base metals, as have supply losses in Libya and South Sudan.
Brent crude were down 34 cents to $108.62 a barrel by 1420 GMT, after dropping 56 cents in the previous session. US oil was down 28 cents to $102.12.