LONDON, Sept 30, (RTRS): OPEC oil output has risen in September from the month before, a Reuters survey found on Wednesday, as Iraq’s northern exports recovered from disruption that had halted supply growth from the group’s second-largest producer. Saudi Arabia and other Gulf members of the Organization of the Petroleum Exporting Countries have kept output mostly steady, a further sign they are sticking to their focus on defending market share instead of prices.
OPEC supply has increased in September to 31.68 million barrels per day (bpd) from a revised 31.57 million in August, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants. With the increase in supply this month, OPEC has boosted production by almost 1.5 million bpd since it switched in November 2014 to defending market share from its previous policy of cutting output to prop up prices.
Oil prices have almost halved in the past year to $48 a barrel because of excess supply, although analysts see signs that OPEC’s strategy to curb growth in higher-cost production by letting prices fall is starting to deliver. “The oversupply is still considerable, but I think it will be less next year as non-OPEC supply is likely to shrink,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt.
The OPEC supply boost in September has come from Iraq and a few smaller producers. Shipments from Iraq’s north via Ceyhan in Turkey by Iraq’s State Oil Marketing Organisation and the Kurdistan Regional Government have increased from August, when halts in the flow along the pipeline from Iraq slowed exports. Exports from Iraq’s main outlet to world markets, its southern terminals, changed little from August’s rate, according to shipping data and industry sources.
Smaller increases have come from OPEC’s two west African producers, Nigeria and Angola, both of which have slightly boosted exports, according to loading schedules. Nigerian exports are set for further growth in October. Output in Iran, eager to reclaim its spot as OPEC’s second-largest producer if and when sanctions are lifted, is edging up, the survey found, and Qatar posted a small supply rise after an accident involving an offshore rig in July that an industry source said slowed output. Kuwait’s output was stable although the United Arab Emirates is pumping more crude due to increasing supplies from its Upper Zakum field, sources in the survey said.
Top exporter Saudi Arabia kept output steady in September as reduced use of crude in domestic power plants was offset by a gentle uptick in exports towards the latter part of the month. Saudi output remains close to the record high of 10.56 million bpd it pumped in June, as it focuses on market share. Riyadh has regained some market share in 2015, according to a Reuters analysis published on Wednesday. Libyan supply edged lower in September. Output remains disrupted by unrest, and negotiations to reopen closed oil facilities have yet to succeed.