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OPEC Guide



Angola, Saudi, Iraq drag OPEC Nov oil output to six-month low: Platts survey

December 7, 2017 — By Eklavya Gupte



  • Saudi output drops to 9.97 mil b/d
  • Iraqi output 4.35 mil b/d; Nigeria 1.84 mil b/d; Iran 3.80 mil b/d
  • Venezuelan output plunges 270,000 b/d on year
  • OPEC Jan-Nov cut compliance at 108%


OPEC oil output in November dived to 32.35 million b/d, its lowest in six months led by declines in eight of the 14 member countries, an S&P Global Platts survey of OPEC and oil industry officials and analysts showed Thursday.


November output slid 220,000 b/d from the previous month due to steady falls in Angola, Saudi Arabia, Iraq, Venezuela, Libya and the UAE. The only two countries to have a production rise were Nigeria and Algeria.


The OPEC output level was 430,000 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.


Last week OPEC and non-OPEC countries agreed to a nine-month extension of their production cut agreement through the end of 2018, with an option to review the deal in June.


OPEC kingpin Saudi Arabia led by example again, reducing its production by 50,000 b/d to a four-month low of 9.97 million b/d, as it reduced its domestic burning of crude to a four-month low and curbed exports.


The kingdom had previously indicated a sharp dip in its November and December crude export allocations. Contributors to the survey said that in place of burning crude for power generation, Saudi Arabia had increased its refining volumes as it pushes up oil product exports.


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Saudi oil minister Khalid al-Falih indicated last week that his country was likely to continue curbing its output, but warned he will come down hard on non-compliant countries. "I will be breathing down the necks of the other 24 countries,” Falih said on the sidelines of last week’s OPEC meeting in Vienna. “2018 will very much mirror what we have done in 2017.”



ANGOLAN OUTPUT PLUMMETS


The biggest decline was in Africa’s second largest producer. Angolan output fell 100,000 b/d to 1.61 million b/d in November, the lowest since October 2016.


Exports and production of grades such as Plutonio, Hungo and Girassol were down. Some panellists also said output was down due to some minor FPSO maintenance.


Iraqi output slumped further as output from the disputed Kirkuk fields of Bai Hasan and Avana Dome remained shut-in, reducing pipeline exports to the Turkish coast to less than half the pipeline’s capacity.


Iraq produced an average of 4.35 million b/d of crude in November, a fall of 30,000 b/d from the previous month, despite a steady rise in exports from its southern terminals.


Panellists said refinery runs and direct crude burns were also lower month-on-month.



NIGERIA, ALGERIA BUCK TREND


Nigeria and Algeria were the only two countries that bucked the trend, posting rises in production. Nigerian oil output rebounded by 60,000 b/d to 1.84 million b/d, boosted by a longer loading program as output of key export grades like Agbami, Escravos and Amenam Blend rose on the month.


Last week, OPEC also called on Libya and Nigeria, which were exempt from the cuts, not to exceed a combined output of 2.8 million b/d from January next year.


Nigeria’s oil minister Emmanuel Kachikwu acknowledged that OPEC had asked his country and Libya to maintain “production discipline.” “Without any definitive obligation, we are going to try as much as we can to keep to our 2017 highest production level,” he said after the meeting, adding that Nigerian crude oil output had reached a high of 1.85 million b/d last year.


Meanwhile, Libyan oil output fell 30,000 b/d to 950,000 b/d as, despite a slight rise in exports, total production fell due to outages at the Wintershall-operated As-Sarah field caused by protests.



VENEZUELA OUTPUT PLUNGES FURTHER


Venezuelan production fell to 1.80 million b/d in November, the survey found, as it reduced exports and kept refinery runs low.


Exports to its key crude buyers like India, China and the US were all down sharply, the survey found, while Venezuela’s imports of diluents to blend with its heavy crude also remained low.


Venezuela's oil production has fallen 270,000 b/d since November last year on the country’s economic and social woes.


Its quota under the production cut deal is 1.972 million b/d, making it the most compliant -- if unwillingly so -- member of the coalition.



THE YEAR AHEAD


OPEC output has slumped 470,000 b/d since reaching a 2017 high of 32.82 million b/d in July. As a result, compliance with the agreed output cuts has also stayed largely steady over the past few months.


Total compliance among the 12 countries with quotas under the output cut agreement is 108%, according to an average of January through November production.


The UAE and Iraq, the two countries that had complied least with the agreement, have more recently come into line.


But OPEC and its non-OPEC allies in production cuts have reiterated that their job is not yet done, as they decided to extend the 1.8 million b/d cuts to the end of next year.


Falih acknowledged that the coalition had “only recently passed the halfway mark” in the goal of reducing OECD oil stock levels to their five-year average, and was mindful that “the low demand period through the second quarter of 2018” was imminent.


The rebalancing of the oil markets has still not been fully realized and with numerous analysts projecting another resurgence of US shale oil next year, OPEC and non-OPEC’s mettle will be tested further.


The Platts estimates were obtained by surveying OPEC and oil industry officials, traders and analysts, as well as reviewing proprietary shipping data.


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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