The 12-member Organization of the Petroleum Exporting Countries’ (OPEC) pumped an average 28.84 million barrels per day (b/d) of crude oil in April, down from 29.17 million b/d in March, a Platts survey of OPEC and oil industry officials and analysts showed May 9.
Excluding Iraq, which does not participate in OPEC output agreements, the 11 members bound by quotas (OPEC-11) pumped an average 26.18 million b/d during the month. This is down 340,000 b/d from the March estimate of 26.52 million b/d.
Lower volumes from Saudi Arabia, Libya and Angola accounted for almost the entire drop.
“With oil prices taking centre stage, many pundits have dismissed fundamental supply and demand as a factor in the recent increases,” explains Platts Global Director of News John Kingston. “One need go no further than these latest statistics to see one reason as to why the price of crude has risen so sharply. It’s nice to point to an easily-understood concept like excessive speculation, but losing one million barrels per day of supply over the last two months in a market where demand has been climbing is having the result economic supply/demand theory would suggest it should have.”
Some participants in the survey revisited their March estimates for Saudi Arabia after oil minister Ali Naimisaid last month that the kingdom had slashed production by some 700,000 b/d to 8.29 million b/d in March because the oil market was oversupplied.
But some industry sources wondered whether the minister’s figure might not have been intended as an average for the month, noting that the kingdom had submitted a figure of 8.655 million b/d to the International Energy Forum’s Joint Oil Data Initiative, or JODI, for March.
In early March, Naimi said Saudi Arabia had increased production to 9 million b/d to make up for the loss of Libyan output and had even created a special blend of crude similar in quality to the lighter, lower-sulfur content Libyan grades. Refiners have shown little appetite for the new Saudi concoction, however.
The survey showed Libyan output dropping further in April, to just 200,000 b/d from 460,000 b/d in March.
In the United Arab Emirates (UAE), the 200,000-barrel-per-day drop in production from the offshore Upper Zakum field does not appear to have had an impact on overall output for the month. Industry sources saidAbu Dhabi kept supply steady by amending production levels at other fields and tapping into storage to meet export commitments.
Angolan production fell 100,000 b/d to 1.6 million b/d, as maintenance and repair work continued on Greater Plutonio.
Qatari production also dipped slightly due to the production shut down at a platform of Denmark’s Maersk Oil at the offshore Al-Shaheen field following a fire on April 21.
The 470,000-barrel-per-day decreases more than offset the increases of 190,000 b/d. Higher Nigerian output accounted for the bulk of the increases, but volumes also rose in Ecuador, Iraq, and Kuwait.
The latest estimates leave the OPEC-11 overproducing its official target of 24.845 million b/d by 1.385 million b/d.
There had been a suggestion earlier this month that OPEC kingpin Saudi Arabia might want to see OPEC raise its official output target at the upcoming June 8 meeting to a level closer to actual production. Subsequent soundings would appear to rule out such a move, however.
