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Apr 09 2012

OPEC Production Hits Fresh Three-Year High

OPEC Production Hits Fresh Three-Year High

OPEC output in March hit a 39-month high, with strong gains in Iraq, Libya and Saudi Arabia eclipsing falling exports from Iran and OPEC’s West African members, MEES calculations show. Furthermore, provisional shipping data strongly points to a further production boost in April.

Perhaps the most significant change came from Iraq, where the commissioning of new export facilities in late February has allowed for held-in output to start flowing to world markets. MEES estimates March southern Iraqi exports at 1.865mn b/d, up from February’s 1.702mn b/d and a post-2003 record. Official figures show March exports even higher at over 1.9mn b/d (compared to official figures of 1.639mn b/d in February). MEES calculates exports on tankers having completed loading rather than flows, and such was the surge late month that this might explain some of the discrepancy between MEES and Iraqi state-marketer SOMO figures. Completion rates for 20-31 March stood at an impressive 2.3mn b/d, according to MEES calculations.

A lack of storage and bottlenecks elsewhere on the Iraqi southern oil transportation system mean that a targeted increase of 500,000 b/d this year (the export facility’s capacity is 900,000 b/d) is going to be difficult to achieve. Nevertheless, Iraq appears poised for a paradigm shift in southern export levels (MEES , 26 March). A stoppage in Kurdish contributions to Iraqi northern exports (see page 18) came too late to affect March northern figures, but if this Kurdish-Baghdad oil dispute is not resolved, this could impact on overall Iraqi export levels.

Saudi Arabia’s production levels firmed up at around the 9.85-9.9mn b/d. But while Saudi supply reassurances and talk of a release from strategic stocks had some impact on oil prices in late March (MEES, 26 March), by early April OPEC Basket prices bounced back up over $122/B. Current backwardation in oil prices, or the premium of prompt barrels over those further out, would indicate that demand is not as weak as claimed by some producers. “Given the industry wants to hold more stock, the only way to acquire more oil is to bid it up from other holders of barrels, and that is what is giving the market its backwardated structure,” notes Leo Drollas, Director and Chief Economist at the Centre For Global Energy Studies (CGES). Saudi Arabia has said that it will provide oil to all customers who ask for it. But Saudi official selling prices have largely been seen as high of late, and there is mounting consensus that only discounting these will have a tangible effect on flat prices. Saudi Aramco has, however, lowered most prices for May deliveries (see page 12).

Shipping data and several credible anecdotal accounts have prompted an upward revision of 50,000-100,000 b/d to MEES Kuwait production estimates going back to November.

OPEC Crude Oil Production Mar 2011 – Mar 2012 (MEES Estimates – ‘000 B/D)

2012

2011

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Algeria

1,230

1,230

1,230

1,250

1,250

1,270

1,280

1,290

1,290

1,280

1,280

1,280

1,280

Angola

1,700

1,790

1,720

1,770

1,770

1,700

1,700

1,620

1,650

1,520

1,580

1,500

1,700

Iran

3,400

3,460

3,500

3,520

3,550

3,570

3,590

3,580

3,580

3,610

3,630

3,600

3,610

Iraq

2,949

2,693

2,766

2,852

2,842

2,775

2,783

2,854

2,788

2,796

2,731

2,672

2,519

Kuwait†*

2,850

2,880

2,830

2,800

2,770

2,650

2,600

2,550

2,500

2,500

2,490

2,480

2,480

Libya

1,400

1,320

1,100

825

600

365

110

10

30

40

60

150

300

Nigeria

2,000

2,050

2,100

2,050

2,130

2,000

2,250

2,300

2,350

2,250

2,300

2,200

2,100

Qatar

790

795

790

795

795

800

800

810

810

810

810

790

810

S Arabia†

9,850

9,800

9,650

9,800

10,047

9,500

9,450

9,800

9,700

9,350

9,050

8,770

8,600

UAE*

2,500

2,470

2,540

2,500

2,490

2,450

2,450

2,550

2,510

2,490

2,450

2,500

2,510

Venezuela

2,360

2,370

2,350

2,350

2,350

2,370

2,370

2,350

2,350

2,300

2,280

2,210

2,210

Ecuador

500

495

495

495

495

495

500

490

480

480

480

490

500

Total

31,529

31,353

31,071

31,007

31,089

29,945

29,883

30,204

30,038

29,426

29,141

28,642

28,619

OPEC 11

28,580

28,660

28,305

28,155

28,247

27,170

27,100

27,350

27,250

26,630

26,410

25,970

26,100

* Revised.

† Includes 50% share of Neutral Zone output.

© Copyright MEES 2012.

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