Crude oil output from the Organization of Petroleum Exporting Countries rose to 30.87 million barrels a day in Jan, asserts a survey by Platts. The OPEC output was 30.83 million bpd in December. According to the survey, which was conducted on OPEC, oil industry officers and researchers, this leaves the organization over-producing its output ceiling by 870,000 bpd. A 200,000-bpd increase in Libyan production to one million bpd just 600,000 bpd short of pre-uprising output early last year more than offset mixed reductions totaling 170,000 bpd from Angola, Iran, Nigeria and Venezuela. The output from UAE also saw a little increase of 10,000 bpd to 2.56 million bpd, the survey announced.
“Libyan production is obviously recovering, and it is going to be fascinating to discover how the markets react to these rising volumes… …especially when OPEC is significantly over-producing its 30-million bpd ceiling and with the Vienna secretariat predicting that requirement for OPEC crude in Q1 will be far below current production,” stated by Mr John Kingston, Platts world director of reports. The survey noted that output from OPEC leader, Saudi Arabia at 9.8 million bpd, unvaried from December.
OPEC trimmed its demand outlook for crude from its twelve members for 2012 in total to 30.04 million bpd from the 30.15 million projected four weeks ago.
But for the first 3 months of the current year, the organization slashed its prior prediction by 290,000 bpd to 29.55 million bpd from 29.84 million bpd 4 weeks ago. This tends to suggest that OPEC may want to rein in production over the following 2 months, the survey asserted. OPEC ministers in December agreed to set crude output for all twelve members, including Iraq and Libya, at thirty million bpd. But they didn’t set individual shares.
With revised GDP forecasts in China cutting GDP by expansion by almost 2% and the economy still sluggish in Europe, demand should continue to drop. Current production levels are more than required to replace any losses due to the embargo of Iranian Oil.