Wednesday 20 June 2018

Opec oil output hits 2009 high in December

London, December 31, 2009

Opec oil supply rose in December to a 2009 high led by Nigeria and smaller rises elsewhere in the group, further eroding compliance with agreed output targets, a Reuters survey showed on Thursday.

Supply from the 11 members of the Organisation of the Petroleum Exporting Countries with output targets, all except Iraq, rose to 26.62 million barrels per day (bpd) from a revised 26.53 million bpd in November, according to the survey of oil firms, Opec officials and analysts.

The survey implies Opec has made 58 per cent of promised supply cutbacks, down from 60 per cent in November. Opec's compliance is unlikely to improve for as long as members can pump out more oil without denting the rally in prices.

"We have no change in our attitude that Opec is producing too much," said Paul Tossetti, senior energy adviser at PFC Energy.

"They have asked for more adherence to the targets but they are unlikely to get it from Nigeria or Angola."

Opec kept its official output limits unchanged at a meeting on December 22 in Angola and called for more compliance. A year ago, it agreed to cut supply by 4.2 million bpd in response to lower demand and prices.

Supply from the Opec-11 was 1.78 million bpd higher in December than their target of 24.84 million bpd, the survey found, meaning the group lowered output by 2.42 million bpd of the promised curbs.

That gave the 58 per cent compliance rate, which brings the group's level of adherence with its output limits below its historical average of 60 per cent and far short of its peak of  81 per cent in April and March this year.

Output from all 12 Opec members rose to 29.12 million bpd, the highest since December 2008 according to Reuters estimates because of a small increase in supply from Iraq.

Oil prices lost most of an earlier rise after the survey was released. US crude was up 21 cents at $79.49 at 1232 GMT. It reached a 2009 high of $82.00 in October.

Nigerian recovery

Nigerian supply rose by 60,000 bpd as exports continued to recover after a lull in disruptions caused by militant attacks.

January's output was expected to be even higher based on shipping schedules.

Output from Angola resumed its rising trend in December, but loading programmes suggested supply in January will be lower.

The country is the least compliant in percentage terms with Opec output targets.

Saudi Arabia, Opec's top producer, nudged supply up to 8.16 million bpd, the survey found. Buyers of the its crude said Riyadh allocated more to Asia but maintaining steady to lower volumes to Europe and the US.

The UAE raised supply to some customers in December, according to the survey.

Iran's output was 410,000 bpd above target in December, the most in absolute terms of any member.

Venezuelan output was lower, reflecting technical problems at some of its crude upgrading plants.

The 12 Opec members together pump more than a third of the world's oil. – Reuters

Tags: Opec | London | Output | December | 2009 |


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