OPEC Output Hits 2017 High

OPEC oil output rose in June by 280,000 barrels per day to a 2017 high, a Reuters survey found, as a further recovery in supply from the two member countries exempt from a production-cutting deal offset strong compliance by their peers.

High compliance by Persian Gulf Arab producers Saudi Arabia and Kuwait helped keep OPEC's adherence with its supply curbs at a historically high 92% in June, compared with 95% in May, the survey found, Reuters reported.

But extra oil from Nigeria and Libya, exempted from the cut because conflict curbed their output, means supply by the 13 OPEC members originally part of the deal has risen far above their implied production target.

The recovery adds to the challenge the OPEC-led effort to support the market is facing from a persistent inventory glut. If the recovery lasts, calls could grow within OPEC for the exempt countries to be brought into the production deal.

"The rise in OPEC production will further delay the point at which balance is restored on the oil market," said Carsten Fritsch, analyst at Commerzbank in Frankfurt.

As part of a deal with Russia and other non-members, the Organization of Petroleum Exporting Countries originally pledged to reduce output by about 1.2 million bpd for six months from Jan. 1.

Oil prices have gained some ground but high stocks and rising US output kept them in check. To provide additional support for prices, the producers decided in May to prolong the deal until March 2018.

June's biggest rise came from Nigeria, where output extended a recovery after being curtailed by militant attacks on oil installations. The second biggest was from Libya.

Nigerian output is expected to rise further in the coming weeks. Planned exports in August are scheduled to reach at least 2 million bpd, a 17-month high.