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OPEC Guide



OPEC Sep crude oil output up slightly from Aug on more from Libya, Iraq: Platts survey

October 6, 2017 — By Eklavya Gupte, Herman Wang



  • Venezuelan output slumps to 1.86 mil b/d
  • Libyan output recovery still volatile, production up 80,000 b/d
  • Saudi output 10 mil b/d; Iraq 4.50 mil b/d; Iran 3.83 mil b/d


OPEC oil output in September rose marginally by 10,000 b/d, as production increases in Libya and Iraq were largely offset by declines in Venezuela and Angola, an S&P Global Platts survey of OPEC and oil industry officials and analysts showed October 6.


OPEC's 14 members saw their collective September output rise to 32.66 million b/d from 32.65 million b/d in August.


That is some 740,000 b/d above its declared ceiling of about 31.92 million b/d, when Equatorial Guinea, which joined in May, is added in and Indonesia, which suspended its membership in December, is subtracted.


OPEC announced the ceiling as part of a production cut agreement with 10 non-OPEC members, led by Russia, that calls on the entire group to lower output by 1.8 million b/d.


Libyan oil output rose in September by 80,000 b/d to 910,000 b/d, as the key Sharara field, which has a full capacity of 300,000 b/d, was producing about 200,000 b/d for most of the month after the field was down from August 19 to September 5.


But the North African country's output recovery remains fraught with challenges as the security of many fields remains volatile due to threats from a militant group.


Analysis continues below...


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Iraqi compliance with its quota under the production cut deal remains among the weakest of the OPEC members, with production averaging 4.50 million b/d in September, still 149,000 b/d above its output quota.


Iraqi production rose 40,000 b/d from August on increased exports from the southern terminals on the Persian Gulf and increased refinery consumption.


VENEZUELA DECLINE


Venezuelan production fell 40,000 b/d to 1.86 million b/d in September, the survey found, as the country's crude exports dipped and its imports of diluents to blend with its heavy crude were also curtailed due to Hurricane Harvey.


The decline in Venezuela's output has accelerated in the past several months as various refinery units and heavy crude upgraders have been shut down, exacerbated by the country's deepening economic crisis.


Angolan output fell 30,000 b/d to 1.64 million b/d as exports and production of grades such as Pazflor, Dalia, and Plutonio were down, according to the survey.


Nigerian production, meanwhile, fell 20,000 b/d to 1.84 million b/d in the month, as key grade Bonny Light has been on force majeure since September 16 following the shutdown of the Nembe Creek Trunk Line.


Output in OPEC's largest producer Saudi Arabia was down 10,000 b/d to 10 million b/d, as despite a slight rise in exports, the end of summer resulted in lower direct crude burn, survey participants said.


Iranian output in September was stable at 3.83 million b/d, as despite a marginal rise in crude oil exports, refinery utilization fell, keeping production steady.


The country's oil minister Bijan Zanganeh insisted there was no pressure on Iran to join the cuts.


Iran's output has averaged 3.780 million b/d over the first eight months since the deal came into effect in January, 17,000 b/d below the country's official allocation of 3.797 million b/d.


MARKET STRUCTURE


According to an average of January through September production, total compliance among the 12 countries with quotas under the output cut agreement is 106%.


But that figure is boosted by strong overcompliance in the early part of the year, as discipline has slipped in recent months. September compliance among the 12 countries with quotas was 102%, rebounding from a low of 93% in July.


For OPEC as a whole, the significant recoveries in exempt Libya and Nigeria have undone a big chunk of the cuts.


The combined Libya and Nigeria output for September is 430,000 b/d higher than it was in January, according to survey data.


The last few months have seen some positives for OPEC, notably falling stock levels along with a stronger oil market structure supported by higher global demand.


This also translated in higher oil prices, with ICE Brent rising to over two-year highs of around $59/b in late-September. But prices have since fallen to $56-$57/b as concerns of surging US oil output and exports have re-emerged.


The clamor to include exports as a monitoring mechanism has also grown, after ministers on the monitoring committee, said they would now incorporate export data to bolster trader confidence that the cuts are in fact lowering supplies to the market.


But some members remain hesitant about including exports due to the difficulty in tracking them accurately, as well as the lumpy nature of exports from month to month..


S&P Global Platts OPEC survey methodology


Since 1988, S&P Global Platts has published a monthly survey tracking OPEC crude oil production by country. The estimates are obtained through a review of proprietary shipping data, news reportage and surveys of knowledgeable sources.


Data reviewed include loading programs, export statistics and tanker tracking via Platts cFlow. Sources interviewed for the survey include national oil company or ministry officials; analysts at international agencies, think tanks, consultancies and banks; and traders. The sources remain confidential and are interviewed by a team of Platts oil news reporters -- typically led by Herman Wang, Platts OPEC correspondent, and Eklavya Gupte, Platts senior editor for Europe and Africa news.


The survey is typically published between the 5th and 10th of each month, and it measures oil output -- excluding condensates and NGLs.








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