OPEC oil output has fallen to an eight-year low in September after
attacks on Saudi oil plants cut production, deepening the impact of a
supply pact and U.S. sanctions on Iran and Venezuela, a Reuters survey
found.
The 14-member Organization of the Petroleum Exporting Countries
(OPEC) has pumped 28.9 million barrels per day (bpd) this month, the
survey showed, down 750,000 bpd from August’s revised figure and the
lowest monthly total since 2011.
The Sept. 14 attacks on two
Saudi oil plants shut down 5.7 million bpd of production and sent crude
prices up 20% to $72 a barrel on Sept. 16. The price has since fallen to
$61, near levels before the Saudi attack, pressured by a rapid
production restart and concern about slowing demand.
“Traders are
clearly not particularly concerned about risk premiums in oil,” said
Craig Erlam, analyst at online broker OANDA. “The focus again seems to
be shifting back to the demand dynamics and the risk of further
downgrades.”
OPEC, Russia and other oil producer allies, known as
OPEC+, agreed in December to reduce supply by 1.2 million bpd from the
start of this year. OPEC’s share of the cut is 800,000 bpd, to be
delivered by 11 members, with exemptions for Iran, Libya and Venezuela.
The
11 OPEC members bound by the agreement, which now runs until March
2020, have easily exceeded the pledged cuts. Compliance has been at 218%
in September, up from 131% in August, the survey found.
Two of the three exempt producers also pumped less oil than they did the previous month.
The biggest drop was in Saudi Arabia, which supplied 9.05 million bpd, or 700,0000 bpd less than in August.
RELEASED INVENTORIES
The
drop would have been even larger but for state oil company Aramco
releasing stored crude from its inventories to limit the decline.
Sources in the survey put Saudi production at between 8.5 million bpd
and 8.6 million bpd.
Before
this month’s attack, Saudi Arabia was already restraining output by
more than called for by the OPEC-led supply deal to support the market.
Output
fell further in Venezuela, which is contending with U.S. sanctions on
state oil company PDVSA - aimed at ousting socialist President Nicolas
Maduro - as well as a long-term decline in output owing to a lack of
investment and maintenance.
PDVSA this month suspended some crude
blending and cut production in response to a build in domestic
inventories while the sanctions have proved a deterrent to customers and
shippers.
The survey found a mixed trend among Iraq and Nigeria, both of which have pledged to boost their compliance.
Iraq
trimmed exports from its southern and northern ports, the survey found,
but Nigeria boosted supply slightly and continued to produce above its
OPEC target by the largest margin.
Among other countries raising
output, Libya pumped more because of a higher contribution from the
country’s largest oilfield, El Sharara, after outages that curbed output
in August.
There was little change to supply from the United Arab Emirates and a small increase in Kuwait, the survey found.
September’s
output was the lowest by OPEC since 2011, when the Libyan civil war
caused a collapse in the country’s oil output, excluding membership
changes that have taken place since then, according to Reuters surveys.
The
survey aims to track supply to the market and is based on shipping data
provided by external sources, Refinitiv Eikon flows data and
information provided by sources at oil companies, OPEC and consulting
firms.
Editing by David Goodman
Our Standards:The Thomson Reuters Trust Principles.
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