OPEC production fell in August: survey

OPEC crude output fell last month, according to a new survey. The drop in output comes as Libya’s oil industry continues to struggle under pressure from civil unrest.

A new Bloomberg survey showed on Tuesday that OPEC crude output fell by 70,000 barrels per day in August to 27.06 million barrels per day. The loss was due to hiccups in Libyan output, which fell 150,000 bpd. Meanwhile, the survey showed that both Kuwait and Nigeria increased production.

Production losses in Libya are currently much more significant than 150,000 bpd. But the steep losses are recent and haven’t affected most of the month. Current production losses were estimated at between 500,000 bpd and 700,000 bpd, with major new thrust placed at the El Feel field.

OPEC’s largest member, Saudi Arabia, met its August quota as expected. Iraq, on the other hand, failed to cut production in line with its quota and still produced 320,000 bpd more than it had agreed to in August, according to the survey. Iraq has insisted it will engage in compensatory cuts to offset its overproduction.

Despite significant production losses from Libya, which are not yet fully reflected in OPEC’s August figures, oil prices remain on a downward spiral, falling more than 4% on Tuesday in a market that has some traders locked out. Brent crude fell to $74.06 a barrel on Tuesday afternoon, a loss of 4.46% ($-3.46) on the day. The market’s overriding fear is depressed demand data from China, along with OPEC’s possible withdrawal of production quotas from October – although the group was adamant it would only do so if market conditions called for it.

By Julianne Geiger for Oilprice.com

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