Bloomberg News

OPEC Output Rises to Highest Level Since 2008, Survey Shows

September 30, 2011

(Updates prices in sixth paragraph, adds output in eighth, 12th and 13th, and comment in 11th paragraph.)

Sept. 30 (Bloomberg) -- The Organization of Petroleum Exporting Countries’ oil output in September rose to the highest level since November 2008, as a Saudi cut was outpaced by Iraqi and Libyan gains, a Bloomberg News survey showed.

Production increased 75,000 barrels, or 0.3 percent, to average 30.055 million barrels a day, according to the survey of oil companies, producers and analysts. Daily output by the 11 members with quotas, all except Iraq, dropped 15,000 barrels to 27.285 million, 2.44 million barrels above their target.

Saudi Arabia, OPEC’s biggest producer, reduced output by 90,000 barrels, or 0.8 percent, to 9.76 million barrels a day. August output of 9.85 million barrels a day was at the highest level since at least January 1989 when Bloomberg monthly data begins. The kingdom exceeded its quota by 1.709 million barrels.

“The Saudis don’t want to see a significant price collapse,” said Sarah Emerson, managing director of Energy Security Analysis Inc. in Wakefield, Massachusetts. “I don’t see them making any big cuts for a while because prices are still high enough.”

Saudi Warning

OPEC’s June 8 meeting in Vienna broke up without an accord, the first time in at least 20 years that members couldn’t agree on quotas. Saudi Arabia and other Persian Gulf states wanted OPEC to raise output by 1.5 million barrels a day. Ali al-Naimi, the Saudi oil minister, said his nation was “committed to supplying the needs of the market regardless of the disagreement.”

Crude oil for November delivery dropped $1.58, or 1.9 percent, to $80.56 a barrel at 1:28 p.m. on the New York Mercantile Exchange. Brent oil for November settlement fell 26 cents, or 0.3 percent, to $103.69 a barrel on the London-based ICE Futures Europe exchange.

“The Saudis want to put other members on notice and will refrain from making big cuts,” Emerson said. “They want Iran, Ecuador and other countries that walked out of the meeting in June to feel consequences.”

Nigerian production fell 80,000 barrels a day to 2.15 million this month, the only other member to curb output, the survey showed. Royal Dutch Shell Plc on Aug. 23 declared force majeure, a legal clause that allows it to miss scheduled deliveries for circumstances beyond its control, on its Bonny Light crude exports after multiple pipeline incidents.

Post-War High

Iraqi production rose 90,000 barrels, or 3.4 percent, to 2.77 million a day this month, the highest amount since October 2001. Output had been depressed since the U.S.-led invasion of the country in March 2003. The Persian Gulf nation was the group’s third-largest producer in September.

Libyan output rose 55,000 barrels to 100,000, the survey showed. Production in the North African nation has tumbled from 1.585 million barrels a day in January, the last month before an uprising against the government of Muammar Qaddafi.

“The return of Libyan crude and a weakening economy could have a major impact on the supply-demand balance during the fourth quarter,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.

Angola increased output by 40,000 barrels to 1.7 million this month. The country posted the third biggest production gain in OPEC after Iraq and Libya.

The United Arab Emirates raised output by 15,000 barrels a day to 2.57 million barrels a day in September, leaving the country’s production at the highest level since September 2008. Kuwait increased production 15,000 barrels to 2.56 million, the most since October 2008.

--Editors: Richard Stubbe, Dan Stets

To contact the reporters on this story: Mark Shenk and Karyn Peterson in New York at mshenk1@bloomberg.net.

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.


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