OIL output from the Or-ganization of Petroleum Exporting Countries (OPEC) fell in August by 170,000 barrels per day (bpd), a Reuters survey said. The fall, according to the survey, is due to renewed unrest leading to supplies cut in Libya and other members’ compliant with OPEC’s production-cutting deal.
A dip in supply from top two producers, Saudi Arabia and Iraq, helped to boost OPEC’s adherence to its output curbs to 89 percent, up five percentage points from July, but still short of the levels above 90 percent achieved earlier in the year.
The decline from Libya, and the lack of a further sizeable increase from Nigeria, will ease concerns that extra barrels from the two nations could swamp cutback made elsewhere. Libya and Nigeria were exempt from the cuts because conflict had curbed their production. High compliance and much-reduced output in the exempt countries pushed supply lower in early 2017. But extra Libyan and Nigerian production, and slipping adherence in some countries, prompted output to rise to a 2017 high last month.
To address this, ministers at a July 24, 2017 meeting moved to cap Nigerian output, although they stopped short of asking Libya to join the supply-cutting deal, and called on several members to boost compliance.
August’s biggest drop came from Libya, where output slipped to an average of 900,000 bpd as unrest forced the shutdown of the country’s largest oilfield, Sharara, plus other sites, putting a supply recovery on hold for now. Among countries with higher output, Angola exported more cargoes than in July and supply in Nigeria edged higher as Shell’s Nigerian venture lifted a force majeure on Bonny Light crude exports.
OPEC announced a production target of 32.50 million bpd last year, which was based on low figures for Libya and Nigeria.