OPEC pumps 26.6-mil BPD in July, up 370,000 BPD: Survey

OPEC's eleven members, including Iraq, pumped an average 26.6-mil barrels per day (BPD) in July, up 370,000 BPD from June's 26.23-mil BPD, according to a Platts survey of OPEC and oil industry officials released Friday.

Excluding Iraq, the ten OPEC members with quotas produced an average 25.92-mil BPD, an increase of 150,000 BPD on their combined June output of 25.77-mil BPD, the survey showed.

The OPEC 10 exceeded their 25.4-mil BPD ceiling by 520,000 BPD. Three countries--Indonesia, the UAE and Venezuela--reduced output by a total 70,000 BPD. Venezuelan production averaged 2.58-mil BPD, well below the country's 2.923-mil BPD quota and the 2.9-mil BPD it was pumping before a crippling oil strike several months ago that some analysts believe has permanently reduced Venezuela's output capacity.

Indonesia, whose production has been declining, underproduced its quota by 317,000 BPD. Both Indonesia and Venezuela were the only countries to produce within their respective quotas in July.

Iran, Iraq, Kuwait, Nigeria and Saudi Arabia increased production by a collective 440,000 BPD. The biggest single output increase of 220,000 BPD came from Iraq, whose production rose to 680,000 BPD in July from 460,000 BPD in June. Iran boosted output from 3.69-mil BPD in June to 3.79-mil BPD in July.

Nigerian production recovered further, to 2.15-mil BPD, after political unrest earlier in the year hit output. Saudi Arabia increased output by 40,000 BPD to 8.66-mil BPD in July, leaving the kingdom some 400,000 BPD above its OPEC quota. "They are probably moving up because prices are good," one participant in the survey said. "I think they are very concerned about prices."

Some participants in the Platts survey said they expected Saudi output to increase again in August as part of an unofficial effort by OPEC's biggest producer to keep a lid on oil prices.

OPEC's next meeting is scheduled for Sep 24 but the cartel in theory can increase production by 500,000 BPD without the need to meet if its crude basket stays above the upper limit of the $22-28/bbl target band for 20 consecutive trading days.

The basket has been above $28/bbl since Aug 1 and if it stays above $28/bbl for 20 days OPEC's so-called price band mechanism will be triggered in late August. Earlier this week the US Energy Administration Information, statistics arm of the Department of Energy, warned that OECD commercial oil inventories would not exceed five-year lows unless OPEC, including Iraq, increased output by an additional 1-mil BPD by the end of this year.

It said that with global oil demand projected to grow as fast as non- OPEC supply, "the level of oil inventories will be determined by total OPEC production levels." (*)