Trade Resources Economy OPEC Crude Oil Output Has Declined in November to Its Lowest Since January

OPEC Crude Oil Output Has Declined in November to Its Lowest Since January

Tags: OPEC, oil, crude oil

Reuters reported that OPEC crude oil output has declined in November to its lowest since January because of disruptions to Nigerian output and reduced supplies from Angola and Libya.

A Reuters survey found that supply from the 12 member Organization of the Petroleum Exporting Countries has averaged 31.06 million barrels per day down from 31.15 million barrels per day in October.

OPEC meets next month to review output policy. The survey suggests the 12 member group is still producing over a million barrels per day more than its target of 30 million barrels per day. But any formal cut in output is unlikely with prices well above USD 100 per barrel.

A delegate from one of OPEC's African members said that "The level of price is satisfactory for us. We are producing a little bit more than the target but the market is absorbing this excess. So I think there will not be any change in the target."

According to Reuters surveys, November's total is the lowest since January 2012 when the group produced 30.95 million barrels per day. Output is down by about 700,000 barrels per day from its peak for the year of 31.75 million barrels per day in April.

Disruptions in Nigeria have weighed on OPEC supply this month. Nigerian exports were scheduled to rise above 2 million barrels per day in November but supply declined because of oil spills, flooding and theft.

Exports of four Nigerian crude oil grades including the largest stream, Exxon Mobil's Qua Iboe were under force majeure for all or part of November. The measure still applies to shipments of two of them, Qua and Eni's Brass River.

Lower exports from Angola and a drop in supply in Libya were the other main reasons for the decline in OPEC output. A strike at Libya's Zawiya refinery briefly caused output at one field to be halted earlier in November and on Thursday a protest prompted a second shutdown of the refinery this month.

According to figures from the U.S. Energy Information Administration, Iraq and Iran posted small increases in output this month, according to the survey. Iranian supply has risen by 40,000 barrels per day to 2.71 million barrels per day. That would still be close to its lowest since 1988.

Output from Iran has dropped sharply this year due to US and European sanctions on the country. The embargo bars EU insurance firms from covering Iran's exports, which has hindered imports by some non EU buyers and made Iran more reliant on its own tanker fleet to supply customers.

Sources in the survey said that resumption in sales to South Korea in October has helped exports to increase. But sales to other buyers, such as China, are below contracted volumes and may come under downward pressure in 2013.

An industry source said that there are a lot of customers up for renewals of US sanctions exemptions and these will probably be granted, although with lower volumes.

Exports climbed further in Iraq which has overtaken Iran to become OPEC's second largest producer after Saudi Arabia, even though bad weather slowed shipments from the country's south. Output has risen by 50,000 barrels per day to 3.20 million barrels per day.

There was no sign of any substantial reduction in supply from Saudi Arabia and its Gulf Arab allies which have kept output high all year to keep oil prices in check during the reduction in Iranian exports.

Saudi Arabia pumped 9.90 million barrels per day in November the survey found down 50,000 barrels per day from October. Saudi crude exports in November were higher but domestic use for power generation was lower resulting in little overall change.

Source: http://www.steelguru.com/middle_east_news/OPEC_oil_output_falls_in_November_Reuters_survey/293819.html
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OPEC Oil Output Falls in November
Topics: Metallurgy