Organisation of Petroleum Exporting Countries (OPEC) crude production rose to a record in September, according to a Bloomberg survey.
The increased supply position was driven by returning output from Libya and Nigeria, members who will likely be exempt from last week’s deal to cut supply.
Overall production from member countries increased by 170,000 barrels a day (bpd) from the previous month to 33.75 million bpd, the survey of analysts, oil companies and ship-tracking data showed. Nigeria and Libya added a combined 190,000 bpd which compensated for a drop in output from Saudi Arabia and Angola.
Production from Nigeria and Libya is returning after internal unrest crippled the countries’ oil infrastructure. Together with Iran, they will likely be exempt from a preliminary deal agreed by OPEC in Algiers on September 28 to cut production for the first time in eight years in an effort to revive prices. West Texas Intermediate crude capped the biggest monthly gain since April following the news.
Libya will reach 600,000 bpd by the end of this month, according to Ibrahim Al-Awami, Head of Libya’s National Oil Corp.’s oil measurement department. The country with Africa’s largest crude reserves produced an average of 340,000 bpd in September, up from 260,000 in August.
Nigeria increased production by 7.9 per cent to 1.5 million bpd. The returning barrels came as a delivery halt was lifted on Royal Dutch Shell Plc’s Bonny Light stream early last month. Bonny Light was one of four Nigerian grades under force majeure — a legal clause that allows companies to halt shipments without breaching contracts — for reasons including attacks by militants and saboteurs who seek to thwart export-pipeline operations absent a share of the revenues.
Iran’s production rose by 10,000bpd to 3.63 million bpd. The rapid increase in output that followed the easing of sanctions in January has slowed in recent months, as production has neared pre-sanctions levels.
Oil output in Saudi Arabia — the world’s biggest crude exporter — dropped by 60,000bpd as temperatures retreated from mid-summer highs, triggering a drop in domestic air conditioning usage. Angolan production dipped 40,000 bpd.
OPEC agreed to limit output to a range of 32.5 to 33 million bpd, reversing a two-year-old policy to pump at will. The group will reveal more details about this agreement, including each country’s targets, when it meets at the end of November in Vienna.