OPEC's latest oil production hike in effect since November 1 is likely to add up to 300,000 barrels per day (bpd) rather than 500,000 bpd as announced, the Middle East Economic Survey (MEES) said Monday.
Taking into account capacity restraints and overproduction in October, "the actual increase in crude supply to the market from the OPEC 10 is likely to be in the region of 300,000 bpd," the Cyprus-based industry newsletter estimated.
It said the increase would raise OPEC's output, not including sanctions-hit Iraq which is exempted from the 11-member cartel's production quotas, to 26.94 million bpd.
Officially, the sum total of quotas for the OPEC 10 -- not taking into account overproduction -- was 26.2 million bpd in October before a price-band mechanism came into effect at the end of last month raising production by 500,000 bpd.
"After the latest output boost, the level of spare production capacity in the OPEC area has fallen to an extremely low point," said MEES, giving an estimate of one million bpd for immediately available extra supplies.
Two-thirds of that amount lies in Saudi Arabia and the rest in Venezuela, Kuwait and the United Arab Emirates, the weekly said.
MEES, however, forecast that the cartel's current output level would be "a good deal more than enough" to meet demand for both consumption and stocks up until the middle of 2001.
OPEC would have to embark on a "substantial production cut" before the second quarter of 2001 to keep the basket price from falling below the cartel's band of $22-28 a barrel, compared to current prices of more than $30.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)