The Organization of the Petroleum Exporting Countries (OPEC) oil output has risen in February to the highest since October 2008 due to a further recovery in Libya’s production, higher supplies from Angola and Saudi Arabia, a Reuters survey found.
Supply from all 12 members of OPEC has averaged 31.23 million barrels per day (mbpd), up from 30.95 mbpd in January, the survey of sources at oil companies, OPEC officials and analysts found.
The survey suggests OPEC is producing over 1.2 mbpd more than its target of 30 mbpd. But concern about possible disruption to supply from OPEC member Iran is supporting prices, which are near a 10-month high. “There is a lot of oil supply, but it doesn’t matter at the moment,” said Carsten Fritsch, analyst at Commerzbank. “Other factors are driving prices up - the fear of longer-lasting supply disruptions which have not happened yet.”
In February, the biggest increase in OPEC supply once again came from Libya, where output continues to recover after being virtually shut down during the 2011 uprising that toppled Muammar Gaddafi. February’s total is OPEC’s highest since October 2008, shortly before the group agreed to a series of supply curbs to combat recession, based on Reuters surveys.
Libyan crude oil exports and refinery demand climbed to 1.1 mbpd in February, up from 930,000 bpd in January, according to the survey, getting closer to the pre-war rate of 1.6 mbpd expected later this year. Supply from Angola, which fell in the last few months, also rose in February as the shorter month increased the daily rate. Oil prices were trading below $122 a barrel, having reached a 10-month high above $125.
Gulf Arab OPEC producers were expected in 2012 gradually to cut back the extra supplies they put on the market last year to counter the Libyan supply loss. Instead, top oil exporter Saudi Arabia is boosting output, sources in the survey said. Oil traders say the kingdom has indicated to its customers that it is able to supply extra crude if they need it.
The UAE has trimmed supplies to customers in February, but is expected to supply full contractual amounts to buyers in Asia next month. Kuwait shipped slightly fewer barrels in February, the survey found. Output in Iran, which is facing a European Union ban on its crude from July 1, has not fallen significantly in February, according to an Iranian official and oil industry sources outside the country.
