OPEC oil output hits near lowest of 2 years

OPEC oil output hits near lowest of 2 years

LONDON - Reuters
OPEC oil output has fallen in September to the lowest in almost two years because of work at Iraq’s main export outlet, according to a Reuters survey, although record Saudi Arabian output prevented a larger decline.

Supply from the Organization of the Petroleum Exporting Countries has averaged 30.07 million barrels per day (bpd), down from 30.32 million bpd in August, the survey of shipping data and sources at oil companies, OPEC and consultants found.

Despite signs of recovery, Libyan output is less than half what it was in early 2013 and Nigerian production is far below its potential, underlining the drag that internal strife in OPEC’s African members is having on supply.

“This is a significant reduction and at the same time the Saudis are producing at extremely high levels,” said a participant in the survey. “If it was not for U.S. shale oil, prices would be much higher.”

Brent crude has fallen to $108 a barrel from a six-month high above $117 in August on signs of recovering supply and as the prospect of a military strike on Syria receded.

Behind target

In September, work at Iraq’s Basra Oil Terminal outweighed small increases in supply from Nigeria and Libya, and a second month of Saudi output at around 10 million bpd.

OPEC’s September output is the lowest since October 2011, when the group pumped 29.81 million bpd, according to Reuters surveys, and leaves supply a mere 70,000 bpd above its output target of 30 million bpd.

The biggest fall in supply was in Iraq. Supply declined to 2.7 million bpd from 3.1 million bpd in August because of reduced export capacity due to construction work, as well as a pipeline leak that prompted a cut in output.

Two berths at the Basra Oil Terminal have been closed for part of September, reducing export capacity, Iraqi and industry sources say. Exports remain far below capacity in the north, where Sunni insurgents are targeting Iraq’s pipeline to Turkey.