Countries exempt from OPEC production limits increase their's to set new overall record
OPEC crude production rose to a record in September, according to a Bloomberg survey, driven by returning output from Libya and Nigeria, members who will likely be exempt from last week’s deal to cut supply.My skepticism about the proposed production cuts appears well founded.The Saudi cuts are dwarfed by the production increases by the 'exempt' countries. These guys do not seem to have the self-discipline to run an effective cartel anymore.
Overall production from the Organization of Petroleum Exporting Countries increased by 170,000 barrels a day from the previous month to 33.75 million barrels a day, the survey of analysts, oil companies and ship-tracking data showed. Nigeria and Libya added a combined 190,000 barrels a day 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 Sept. 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 barrels a day 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 barrels a day in September, up from 260,000 in August.
Nigeria increased production by 7.9 percent to 1.5 million barrels a day. The returning barrels came as a delivery halt was lifted on Royal Dutch Shell’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 10,000 barrels a day to 3.63 million barrels a day. 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.