OPEC nations pumped slightly more crude in September as Libya’s biggest oil field returned to production.
Output from the Organization of Petroleum Exporting Countries was 32.83 million barrels a day in September, a gain of 120,000 barrels a day from August, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data.
Production in Libya, which along with Nigeria is exempt from output cuts, rebounded 30,000 barrels a day to 920,000 barrels in September as the Sharara field restarted after a halt of more than two weeks. Nigerian output increased by 20,000 barrels to 1.77 million barrels a day, just short of the 1.8 million barrels a day that could eventually lead to its participation in OPEC’s effort to reduce output.
Saudi Arabia, OPEC’s biggest producer, boosted production by 60,000 barrels a day to 10.06 million barrels, while Gulf neighbour Kuwait lifted output by 50,000 barrels to 2.76 million barrels a day. The recovery in production puts OPEC back to levels reached in July when the group pumped 32.85 million barrels a day.
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The compliance rate of the 12 members who agreed to curb their supply dropped to 82 percent, from 88 percent the month before, the survey showed.
Last month at a meeting in Vienna, OPEC and its allies including Russia stopped short of saying whether their existing deal should be prolonged when it expires at the end of March.
The producers have enjoyed a recovery in oil prices as their efforts to draw down stockpiles helped rebalance the market. While a threat from Turkey to interrupt crude export flows from Iraqi Kurdistan also weighed on sentiment, there hasn’t yet been any disruption to shipments through the region’s only pipeline.
Brent, the global benchmark, touched a two-year closing high of $59.02 a barrel on Sept. 25. Prices traded at $55.59 as of 4:19 p.m. in London on Monday.
Libya’s Sharara field operated for most of September but suffered another halt on Monday after an armed group forced workers to stop producing. The latest halt highlights the volatility of supply from the nation with Africa’s largest crude reserves.
The prospect of Nigerian output breaching 1.8 million barrels a day was dealt a blow on Sept. 16, when Royal Dutch Shell Plc declared force majeure on Bonny Light crude loadings after the shutdown of the Nembe Creek Trunk Line by operator Aiteo.
— With assistance by Wael Mahdi, Anthony Dipaola, Elisha Bala-Gbogbo, Mohammed Sergie, Salma El Wardany, and Stephan Kueffner
Frontpage February 19, 2020