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LONDON (Reuters): OPEC crude oil output is on course to reach its lowest since October 2011 this month as unrest in Libya, pipeline leaks in Nigeria and Iraqi export disruptions weigh on supplies, a Reuters survey found on Thursday.
Supply from the Organisation of the Petroleum Exporting Countries is set to average 30.18 million barrels per day (bpd), down from 30.42 million bpd in February, the survey of shipping data and sources at oil firms, OPEC and consultants found.
The survey indicates top OPEC exporter Saudi Arabia is still keeping a lid on output. Oil, trading at US$ 109 a barrel, is above Saudi’s preferred level of US$ 100, although prices have fallen 2% this year on concern about the global economic outlook.
“I think that Saudi Arabia is happy going into the second quarter at this level of output and price, although we should expect them to react very quickly if they need to,” Swedish Energy Agency Senior Adviser Samuel Ciszuk said. OPEC’s March output will be the lowest since October 2011 when the group produced 29.81 million bpd, according to Reuters surveys. OPEC output is the closest it has been to its supply target of 30 million bpd since it took effect in January 2012.
OPEC is scheduled to meet on 31 May in Vienna to review its output policy for the second half of the year. At its last meeting held in December, OPEC kept its target unchanged although Saudi has tweaked supply depending on demand Saudi Arabia has kept supply to market little changed at 9.23 million bpd this month, according to the survey. It trimmed output in the last two months of 2012, in a reduction that supported oil prices.
Industry sources still expect an increase in Saudi output in the second quarter, due to growth in Asia and a seasonally higher need for crude in domestic power plants, which is likely to boost OPEC supply overall.
Brent crude, which hit a 2013 high of US$ 119.17 a barrel on 8 February, was trading just above US$ 109 on Thursday. Iraq, Libya and Nigeria have been the drivers of the decline in OPEC’s output this month.
Iraq, the world’s fastest-growing exporter, has shipped less from its Southern ports due to bad weather and problems including a leak from a pumping station. Exports of Kirkuk crude remain restrained by a dispute between the Central Government and the Kurdistan Region over payments.
Crude output has remained under pressure in Libya, where oil installations have become a focal point of protests. Industry sources say output has been affected at fields including Conoco’s Waha.
Supply in Nigeria, disrupted in the last few months by oil spills, flooding and theft, has also edged lower. Output of Bonny Light crude was under force majeure for part of the month after a pipeline leak.
Iran’s crude exports have edged lower in March to around 1.15 million bpd from an upwardly-revised 1.2 million bpd in February, according to the survey.
The US and European sanctions led to a sharp drop in Iranian exports last year, while in March some Asian customers have bought less crude due to maintenance at refineries. Iranian shipments are down from a post-sanction’s high of at least 1.4 million bpd in December.
