Ejiofor Alike with agency reports
There are strong indications that crude oil production by the Organisation of Petroleum Exporting Countries (OPEC) in August reached its highest in recent history, as increased output from Saudi Arabia and other Gulf members make up for production losses in Nigeria and Libya.
Production in top OPEC exporter Saudi Arabia has likely reached a fresh record, as it meets seasonally higher domestic demand and focuses on maintaining market share.
Other big Middle Eastern producers, except Iran, also boosted output, pushing the cartel’s output to 33.50 million barrels per day (bpd) from a revised 33.46 million bpd in July, according to the Reuters survey based on shipping data and information from industry sources.
The failure of the cartel to agree on output ceiling at their December 2015 meeting had led to price drop to an all-time low of $27 per barrel in January this year before it recorded to a year-high of $52 per barrel in June.
The price later dropped but rose towards $48 a barrel from $42 at the start of August, helped by such speculation, but these hopes have waned in recent days.
Of countries with lower output, the biggest drop came from Nigeria as militants attacked oil facilities.
For instance, the Qua Iboe stream, Nigeria’s largest grade, was under force majeure for the whole of August, thus reducing exports
However, the increased output from the Gulf could add to scepticism about renewed OPEC talk of freezing output to support prices.
Supply has risen since OPEC in 2014 dropped its historic role of fixing output to prop up prices as Saudi Arabia, Iraq and Iran pumped more.
Production has also climbed due to the return of Indonesia in 2015 and Gabon in July as members.
The survey showed that the membership changes have skewed historical comparisons. August’s supply from OPEC excluding Gabon and Indonesia, at 32.54 million bpd, is the highest, starting in 1997.
In August, Saudi Arabia is expected at least to match July’s record of 10.67 million bpd, while other industry sources told Reuters a new record as high as 10.90 million bpd was possible in August.
Saudi Energy Minister, Khalid al-Falih told Reuters last week that August production had remained around July’s level, without giving a precise figure.
The United Arab Emirates continues to expand output, hitting 3.0 million bpd in August for the first time in the Reuters survey. Iraq and Kuwait pumped slightly more than in July, the survey found.
Supply in Iran, OPEC’s fastest source of production growth earlier this year after the lifting of Western sanctions, has held steady this month as output nears the pre-sanctions rate. Iran is seeking investment to boost supply further.
Libyan output slipped further and another decline occurred in Venezuela, hit by an economic crisis.