OPEC increased crude oil production by 100,000 barrels per day (b/d) to 28.57 million b/d in July, according to a just-released Platts survey of OPEC and oil industry officials and analysts. This is an increase from the 28.47 million b/d pumped in June.
Production from the 11 members bound by quotas, not including Iraq, edged up by 80,000 b/d to 26.12 million b/d in July from 26.04 million b/d in June, the survey showed.
“OPEC appears to be fairly relaxed now about its output restraint measures, with the level of compliance now below 70%,” said John Kingston, Platts global director of oil. “Despite the apparent rising levels of beyond-quota production, it seems unlikely that the group will take any measures at its upcoming September meeting beyond calling for stricter compliance so long as prices remain close to $70 per barrel or above.”
OPEC production had already risen in April, May and June after having fallen steadily since August 2008. Before April, production had been declining as the group responded to the plunge in oil demand caused by the global economic recession. However, the OPEC-11 failed to bring their volumes down to the 24.845 million b/d target which came into effect on January 1 this year.
The July estimates leave the OPEC 11 some 1.075 million b/d in excess of their 24.845 million b/d target and reduce the group’s level of compliance with the 4.2 million b/d in crude output cuts agreed late last year to 69.64%, from 71.5% in June. March had shown the highest level of compliance with the cuts, 81.8%.
OPEC kingpin Saudi Arabia boosted output by 50,000 b/d, the survey showed. Smaller increases came from Nigeria (30,000 b/d), Iraq (20,000 b/d), and Venezuela (10,000 b/d). Angolan volumes dipped slightly.
OPEC has not published individual country quotas subject to the 24.845 million b/d target; the quotas have been calculated by Platts.
Crude futures prices had been on a broadly upward trend since mid-February, which may have encouraged leakage. For example, OPEC’s own basket of crudes stood at $38.14/barrel on February 19. On August 6, the basket reached $72.92/b, its highest level so far this year.
OPEC ministers have twice endorsed the December agreement, most recently at a May 28 meeting in Vienna. OPEC’s next scheduled meeting is in September.
