OPEC oil output highest since 2012

Supply from the Organisation of the Petroleum Exporting Countries averaged 30.96mn bpd in September, up from 30.15mn bpd in August, according to the survey.

Dispite falling from $115 per barrel in June to $97 on Tuesday, oil prices did not worry some OPEC’s maijor producers such as Saudi Arabia that maintained its output high- a main factor in boosting OPEC’s oil supply to its highest in 13 months. The drop in oil prices, did put certain pressure on Iran’s budget, however, and non-member Russia.

This month, the largest increase has come from Libya, where supply is up by 280,000 bpd. Iraq, Nigeria, Angola and Saudi Arabia also boosted output.

OPEC’s October output is the highest since November 2012 when it pumped 31.06 million bpd, according to Reuters surveys. But certain oil output outages in Libya, torren by internal violence, kept output below OPEC’s nominal 30mn bpd target in earlier months of the year.

Iraq, like Libya, has also increased supplies due to higher exports from Iraq’s southern terminals and increased output from fields in Kurdistan. However, fighting has hit supply of Kirkuk crude from the north and shut down the Baiji refinery, keeping crude output below Iraq’s potential. Nigerian output has climbed in September, and another increase has come from Angola where CLOV, a new crude stream operated by Total, is ramping up exports.

So far, there is no sign of any further trimming, according to the survey. Saudi Arabia remains possitive on demand rising up with the approach of winter and return of refineries from maintenance – factors that would argue against cutting output. Sources in the survey said supply to market had increased this month.

Some OPEC members have voiced concern over the drop in prices and its meeting on 27th Novemeber in Vienna is likely see a debate on whether output needs to be cut. OPEC’s own forecasts suggest demand for its crude will fall to 29.20mn bpd in 2015 due to rising supply of U.S. shale oil and supplies from other producers outside the group – almost 1.8mn bpd below current output according to this survey.

Iranian output was steady in September, the survey found. Western sanctions over Iran’s nuclear work are restraining its output, although supply has risen since the start of the year following a softening of the measures. Iran’s budget needs oil prices well above $100, among the highest in OPEC.