October 8, 2010, LONDON, (Coal Geology)– Platts – Crude oil production from the 12-member Organization of the Petroleum Exporting Countries (OPEC) averaged 29.03 million barrels per day (b/d) in September, down 80,000 b/d from an estimated 29.11 million b/d in August, a just-released Platts survey of OPEC and oil industry officials and analysts showed.
Excluding Iraq, which does not participate in OPEC production agreements, the 11 members bound by quotas (OPEC-11) produced an average 26.63 million b/d, down 160,000 b/d from August’s 26.79 million b/d. The survey found that this drop is likely due in large part to maintenance-related issues in Angola
Small output decreases totalling 40,000 b/d came from Iran and the United Arab Emirates (UAE). Only Iraq and Nigeria boosted volumes, by 80,000 b/d and 20,000 b/d respectively.
The latest estimates leave the OPEC-11 overproducing their 24.845 million b/d output target, in place since January 2009, by 1.785 million b/d. Platts calculates compliance with the 4.2 million b/d of output cuts agreed in late 2008 to be around 57.5%.
OPEC ministers’ meeting in Vienna on October 14 are not expected to make any changes to the existing agreement, although the OPEC secretariat’s September oil market report expressed concern that world oil demand could weaken over the remainder of this year.
“There’s a sweet spot for OPEC going into its meeting next week,” said John Kingston, Platts global director of news. “The price of oil is actually running at the high end of a $75-$85 range; demand is holding to slightly rising; there is no tremendous pressure from any member country looking to put a lot of oil on to the market. Given all that, chances are very slim that this meeting will take any steps at all that would impact the world’s oil supply.”
Earlier this week, the International Monetary Fund (IMF) said it expected world economic growth next year to be lower than previously thought, cutting its previous forecasts made in July by 0.1 percentage point to 4.2%, although it revised its growth forecast for this year by 0.2 percentage point to 4.8%.
OPEC secretary general Abdalla el-Badri last month told a press conference marking the oil organization’s 50th anniversary that the group has been anxious not to take any action that could jeopardize global economic recovery.
“We don’t want to rock the boat,” Badri said at the time. “We don’t want to see a double dip recession which will affect…everybody.”
International crude benchmarks have traded within a $70-$80 per barrel (/b) band for the past few months. U.S. light crude futures settled October 7 at $81.67/b and North Sea Brent at $84.43/b.
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