OPEC Output at 6-Month Low

OPEC Output at 6-Month LowOPEC Output at 6-Month Low

OPEC’s oil supply fell by 270,000 barrels per day (bpd) in December to a six-month low as fighting cut Libyan output, offsetting record Iraqi southern exports and stable Saudi Arabian production, Gulf Business reported.

Libyan turmoil is effectively lowering output by the Organization of the Petroleum Exporting Countries (OPEC), even after oil ministers decided at a meeting in Vienna last month against a formal reduction to defend market share.

Supply from OPEC averaged 29.98 million bpd in December, down from a revised 30.25 million bpd in November, according to a survey based on shipping data and information from sources at oil companies, OPEC and consultants.

OPEC at its Nov. 27 meeting retained its output target of 30 million bpd, sending oil prices to a four-year low close to $71 a barrel. Crude has since fallen further, hitting a 5 1/2-year low of $56.74 on Tuesday, pressured by a global glut.

Still, actual OPEC supply has fallen for a third month to the lowest since June when the group pumped 29.92 million bpd. September output of 30.84 million bpd was the highest since November 2012. The largest reduction has come from Libya, where output averaged 400,000 bpd in December and dropped to around 350,000 bpd by the end of the month from 800,000 bpd at the start, according to industry sources and Libyan oil officials.

Fighting has closed Libya’s two largest ports, Es Sider and Ras Lanuf, while the western ports of Zawiya and Mellitah have also halted oil exports.

Nigerian output fell in December as crude streams including Bonny, Qua Iboe and Agbami exported fewer cargoes. Shipping schedules point to an increase in January and imply production above 2 million bpd. Maintenance at oilfields and other facilities had smaller impacts in some OPEC members. Kuwaiti output edged lower due to the shutdown of the Khafji oilfield, run by Saudi Arabia and Kuwait, while production in Qatar, where maintenance has been taking place, also declined slightly.

Saudi Arabia pumped 9.60 million bpd in November and output this month has been flat, industry sources who track Saudi supply said. Saudi Oil Minister Ali al-Naimi, who convinced his fellow ministers of the need to defend market share, said on Dec. 21 Saudi Arabia would not cut its output. The largest increase came from Iraq, which boosted exports this month from its southern terminals to at least 2.65 million bpd, the highest since at least 2003. The drop in OPEC output since September reduces the size of the projected market surplus in 2015, but if supply remains at December’s rate the group will be pumping close to 2 million bpd more than the demand for its crude in the first half.