OPEC oil output rises to more than 3-year high
OPEC oil output has risen in February to the highest since October 2008 due to a further recovery in Libya’s production, higher supplies from Angola and Saudi Arabia, a Reuters survey found on Wednesday.
Supply from all 12 members of the Organization of the Petroleum Exporting Countries has averaged 31.23 million barrels per day (bpd), up from 30.95 million bpd in January, the survey of sources at oil companies, OPEC officials and analysts found.
The survey suggests OPEC is producing over 1.2 million bpd more than its target of 30 million bpd. But concern about possible disruption to supply from OPEC member Iran is supporting prices, which are near a 10-month high.
"There is a lot of oil supply, but it doesn’t matter at the moment," said Carsten Fritsch, analyst at Commerzbank. "Other factors are driving prices up – the fear of longer-lasting supply disruptions which have not happened yet."
In February, the biggest increase in OPEC supply once again came from Libya, where output continues to recover after being virtually shut down during the 2011 uprising that toppled Muammar Gaddafi.
February’s total is OPEC’s highest since October 2008, shortly before the group agreed to a series of supply curbs to combat recession, based on Reuters surveys.
Libyan crude oil exports and refinery demand climbed to 1.1 million bpd in February, up from 930,000 bpd in January, according to the survey, getting closer to the pre-war rate of 1.6 million bpd expected later this year.
Supply from Angola, which fell in the last few months, also rose in February as the shorter month increased the daily rate.
Oil prices were trading below $122 a barrel on Wednesday, having reached a 10-month high above $125 on Friday.
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Gulf Arab OPEC producers were expected in 2012 gradually to cut back the extra supplies they put on the market last year to counter the Libyan supply loss.
Instead, top oil exporter Saudi Arabia is boosting output, sources in the survey said. Oil traders say the kingdom has indicated to its customers that it is able to supply extra crude if they need it.
The United Arab Emirates has trimmed supplies to customers in February, but is expected to supply full contractual amounts to buyers in Asia next month. Kuwait shipped slightly fewer barrels in February, the survey found.
Output in Iran, which is facing a European Union ban on its crude from July 1, has not fallen significantly in February, according to an Iranian official and oil industry sources outside the country.
Iran’s top oil buyers in Europe are making substantial cuts in supply for March loading, industry sources have said, and it is not yet clear where Iran will sell the displaced crude.
Supply in Iraq, expected to rise this year, has yet to do so, the survey found. Bad weather has delayed the startup of a new Gulf crude export facility that will allow a 300,000 bpd boost in Iraqi exports.
OPEC at a meeting in December adopted a target to produce 30 million bpd, settling an argument which broke out in 2011 after Iran and other members opposed a Saudi-led plan to raise OPEC’s production ceiling.