LONDON, Aug. 9, 2011 /PRNewswire/ -- Platts – The 12-member Organization of the Petroleum Exporting Countries' (OPEC) oil output continued its upward climb in July, increasing by 430,000 barrels per day (b/d) from June to 30 million b/d, its highest level since December 2008, a just-released Platts survey of OPEC and oil industry officials and analysts showed.
"Even as OPEC production rises, global oil prices are falling," said John Kingston, Platts global director of news. "With production at the highest levels we've seen since December 2008, the question now is, if oil prices continue to fall, will we see OPEC volumes fall too?"
The single biggest increase came from Saudi Arabia, which boosted output by 300,000 b/d to 9.8 million b/d from 9.5 million b/d the previous month.
Angola also contributed a sizeable increment of 150,000 b/d with the return of production from the offshore Plutonio field.
Other smaller increases came from Kuwait, Venezuela, Nigeria and the United Arab Emirates.
Decreases totalling 120,000 b/d came from Libya, Iran and Iraq. Libyan output was estimated at just 60,000 b/d in July – only a fraction of the 1.6 million b/d the country was producing before the uprising against the regime of Moammar Qadhafi earlier this year.
Saudi production in particular has been rising recently to compensate for lost Libyan production.
Strong oil prices have also driven higher production from OPEC in general, with North Sea Brent holding above $100 per barrel (/b) for much of this year and trading at a two-and-a-half year high of $127.02/b on April 11. However, prices have skidded downward in recent weeks due in large part to U.S. and European economic turmoil. On August 9, Brent futures plunged below $100/b for the first time since February 2011.
OPEC does not currently have an output agreement, having failed to reach a deal on production policy at its June 8 meeting. The group's economic experts had forecasted that demand for OPEC oil would jump by some 2 million b/d between the second and third quarters. Saudi Arabia wanted OPEC to boost actual estimated production of 28.8 million b/d by 1.5 million b/d to meet the expected higher demand, but Iran, Algeria and several other countries refused to back the proposed increase.
The previous agreement, which set a target of 24.845 million b/d the 11 members bound by quotas (OPEC-11), was agreed in late 2008 as the deepening world recession sent prices plummeting from all-time highs of more than $147/b in July of that year to less than $40/b. A Platts survey estimated total OPEC production, including that of Iraq, at 30.74 million b/d in December 2008. That figure fell to 28.97 million b/d in January, the month OPEC's 4.2 million b/d of output cuts came into effect.
But the so-called OPEC-11 never managed to reduce output anywhere near the 24.845 million b/d target, which had become largely notional long before the June 8 meeting. In May, for example, the OPEC-11 exceeded the target by some 1.5 million b/d. Production and exports from Iraq, which does not participate in OPEC output pacts, meanwhile, has continued to expand.
OPEC has scheduled its next meeting for December 14 in Vienna, but a senior oil official from Iran, the current holder of the OPEC presidency, said late last week that ministers would hold consultations on a possible emergency meeting if oil prices continued to fall.
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