Opec’s crude output hits three-year high

Opec oil output rose in December to the highest since October 2008, a Reuters survey found yesterday, as members showed little sign yet of lowering output to make room for recovering Libyan supplies.

Supply from all 12 Opec members averaged 30.74 million barrels per day (bpd) last month, up from a revised 30.62m bpd in November, the survey of sources at oil companies, Opec officials and analysts found.

It indicates Opec, source of more than a third of the world’s oil, is producing more than the target of 30m bpd it adopted at a December 14 meeting, as oil prices above $100 a barrel provide little incentive for supply cuts.

In December, the biggest increase in Opec supply came from Libya, where production continues to recover after being shut down during the uprising which toppled Muammar Gadaffi.

"It’s surprising how successful the Libyans have been so far," said Samuel Ciszuk, consultant at KBC Energy Economics.

Libyan oil exports and refinery demand climbed to 750,000 bpd in December, up 250,000 bpd from November but short of the production figures given by officials.

The survey provides little evidence Opec producers are curbing output drastically to make way for increased Libyan output.

Saudi Arabia and its Gulf Opec allies raised production in the second half of 2011 after failing to convince Iran and other members to agree to a co-ordinated increase to meet the shortfall in supplies from Libya.

Opec settled the six-month-old argument at its December meeting in Vienna by adopting the 30m bpd target.

However, analysts said that without defined individual national quotas, leakage above the new limit remains very possible.

In November, supply from Saudi Arabia was revised 350,000 bpd higher to 9.8m bpd as it shipped more crude to Asia. In December, output dipped slightly.

"In November, there was a very sharp uptick and what I saw in December was practically no change, a small reduction maybe," a shipping industry source said.

Kuwait increased production in December and supply nudged higher in the UAE. The survey has lower estimates of Kuwaiti supply than Kuwaiti officials, who say the country is pumping 3m bpd or more.

Venezuelan output was pegged slightly higher.