LONDON: Opec crude output hit a four-month low in July as unrest and conflict in Libya and Iraq disrupted supplies, a Reuters survey found yesterday, a further unplanned cutback bringing supply closer to the organisation’s target.
Supply from the Organisation of the Petroleum Exporting Countries has averaged 30.25m barrels per day (b/d), down from 30.38m b/d in June, the survey of shipping data and sources at oil firms, Opec and consultants found.
The survey further illustrates that internal strife is undermining supplies from African Opec producers and putting a brake on the plans of Iraq, Opec’s second-largest producer, to expand exports — propping up oil prices.
“These outages come at a time when global crude demand is reaching its seasonal peak,” said Harry Tchilinguirian, head of commodity market strategy at BNP Paribas in London. “As such, they help to put a floor under the Brent price at circa $100.”
In July, involuntary curbs by Iraq and Libya have outweighed extra crude from top Opec exporter, Saudi Arabia, which industry sources say has refined more crude and sent more to domestic power plants to meet demand for air conditioning.
Opec’s July output is the lowest since March 2013, when the group pumped 30.18m b/d, according to Reuters surveys, and leaves supply a mere 250,000 b/d above its output target of 30m b/d.
The most notable drop in Opec output has come from Libya. Protests at oilfields and terminals have cut supply further to around 1.15m b/d, according to sources in the survey.
Iraq’s exports have slipped to 2.25m b/d in July, according to shipping data. Iraq’s Sunni insurgents are targeting its northern pipeline, while technical problems in the south have also weighed on supply.
The world’s fastest-growing exporter in 2012, Iraq is at risk of seeing its output decline this year.
Supply in Nigeria, increasingly disrupted by oil spills and theft from pipelines, remains under downward pressure and, according to the survey, posted a small decline in July. Supply also fell in Angola due to export scheduling hiccups.
Iranian exports
Iranian crude exports were estimated at around 1m b/d in July and its supply to market stable at 2.65m b/d. US and European sanctions on Iran have more than halved its exports since early 2012.
With Brent crude above the $100-mark favoured by Saudi Arabia and most other members, Opec at its last meeting held in May agreed to keep the output target of 30m b/d.
The group is not scheduled to meet again until December and has effectively left short-term market management to Saudi Arabia, which tweaks supply informally depending on demand.
Reuters
