OPEC oil output rises more on Libya restart, Iraq: Reuters survey

In this news, we discuss the OPEC oil output rises more on Libya restart, Iraq: Reuters survey.

LONDON (Reuters) – OPEC oil production rose for a fourth month in October, according to a Reuters survey, as restarting more Libyan facilities and surging Iraqi exports canceled full membership of the other members to a supply reduction agreement led by OPEC.

The 13-member Organization of the Petroleum Exporting Countries pumped 24.59 million barrels per day (b / d) on average in October, according to the survey, up 210,000 b / d from September and a boost from the three-decade low reached in June.

An increase in OPEC supply and a further blow to demand with rising coronavirus cases weighed on oil prices, which fell 8% in October to nearly $ 37 a barrel. This puts pressure on OPEC and its allies, known as OPEC +, to postpone an increase in supply scheduled for January 2021, some analysts say.

“Demand for oil is currently not favorable,” said Stephen Brennock of broker PVM. “At the bare minimum, OPEC + will have to postpone its current production levels until the end of March.”

Libya is one of the OPEC members exempted from an OPEC + deal to reduce supply.

OPEC + achieved a record reduction of 9.7 million bpd, or 10% of global production, from May, as the pandemic destroyed demand. Since August, the group has been pumping more as the reduction has fallen to 7.7 million bpd, of which OPEC’s share is 4.868 million bpd.

Another increase of 2 million bpd is expected in January, although Saudi Arabia and Russia are in favor of continuing the current cuts, OPEC sources said.

In October, the OPEC countries bound by the agreement provided 101% of the promised reduction, according to the survey, stable from September.

LIBYA, IRAQ

October’s increase means OPEC pumps about 2.2 million bpd more than June’s figure, which was the lowest since 1991. PRODN-TOTAL

Libyan production is increasing after the commander of eastern Libya, Khalifa Haftar, said on September 18 that his forces would lift their eight-month blockade on oil exports.

The survey found that production rose 250,000 bpd in October, a faster rebound than some analysts and OPEC officials had expected.

The second largest increase came from Iraq, which increased exports from its southern terminals. Compliance was still almost 100%, higher than that Iraq had managed in previous OPEC + agreements.

According to the survey, Saudi Arabia, the largest exporter, has kept production at a stable level, as has Kuwait.

There has been little change in the offer from Iran, which is also exempt from the OPEC cut, after an increase in September in defiance of US sanctions. Exports were slightly lower in October, according to the survey.

Among OPEC members that cut production, the biggest reduction came from the United Arab Emirates, which exceeded their quota in August. Industry sources said the reduction suggested the UAE was still making up for its August increase.

Venezuela, the third OPEC member exempted from the supply cut, also posted a decline.

The Reuters survey aims to track market supply and is based on shipping data provided by external sources, Refinitiv Eikon flow data, information from oil trackers such as Petro-Logistics and Kpler, and information provided by sources from oil companies, OPEC and consultants.

Additional reporting by Ahmad Ghaddar and Rania El Gamal; edited by Mark Potter

Original © Thomson Reuters

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