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Opec oil output drops in November as Libyan recovery falters
[LONDON] Opec's oil supply in November fell by 340,000 barrels per day (bpd) as a recovery in Libya faltered, a Reuters survey found, although a lack of deliberate cutbacks by Saudi Arabia and other key members underlines their focus on defending market share.
The group on Nov. 27 decided against cutting production to support prices, a departure from its policy of adjusting output to keep crude around US$100 a barrel. Prices have slipped since and fell below US$68 to the lowest since 2009 on Monday.
Supply from the Organization of the Petroleum Exporting Countries averaged 30.30 million bpd in November, down from a revised 30.64 million bpd in October, according to the survey based on shipping data and information from sources at oil companies, Opec and consultants.
Opec at its meeting in Vienna retained its output target of 30 million bpd, despite its own forecasts of a surplus and calls from members including Iran for output cuts.
Still, actual supply has fallen for a second month from September's 30.84 million bpd, the highest since November 2012, as conflict in Libya weighed on its output recovery and makes the future direction hard to predict.
"The outlook for Libyan production is completely unclear, steered by the situation on the ground," said Sam Ciszuk of the Swedish energy agency.
"Opec sent a very strong signal, so it would be strange to see anyone cutting output voluntarily."
As well as a 150,000-bpd reduction in Libya, Angolan supply declined by 140,000 bpd as a result of maintenance at Total's Girassol field, the survey found.
Maintenance also had an impact elsewhere. The shutdown of the Khafji oilfield, run by Saudi Arabia and Kuwait, reduced Kuwaiti output, while production in Qatar fell due to planned work.
Saudi output was assessed 50,000 bpd lower due to a reduced need for crude to fuel domestic power plants. There was little change in crude exports or refinery processing, industry sources who monitor Saudi production said.
Of the countries boosting output, the largest came from Iraq due to higher exports from the country's southern terminals. Nigerian exports also increased. Iraqi exports are set to rise further in December as Kirkuk shipments resume.
November's output points to a surplus as Opec forecasts demand for its crude will fall to 28.45 million bpd in the first six months of 2015. Nonetheless, Opec saw holding onto market share as more important than defending prices. "We have no target price," said Opec Secretary-General Abdullah al-Badri. "We will produce 30 million and watch how the market behaves."