Opec crude oil output is expected to rise in May as extra oil from Saudi Arabia, Nigeria and Iraq counters a further decline in Libyan supply.
Any extra supply from the Organization of the Petroleum Exporting Countries is likely to be welcomed by consumer nations concerned about the impact of oil prices well above $100 a barrel on economic growth and inflation.
Supply from all 12 members of OPEC is expected to average 28.90 million barrels per day (bpd) this month, up from a revised 28.79 million bpd in April, the survey of oil companies, OPEC officials and analysts found.
“OPEC is not producing what it was producing in January before Libya went down,” said Paul Tossetti, senior energy adviser at PFC Energy. “But the market seems to be fairly well supplied currently.
The Libyan crisis has almost shut down output in what used to be Africa’s third-largest producer. OPEC in January pumped 29.63 million bpd, the most since December 2008, according to estimates.
OPEC meets on June 8 in Vienna to review its output policy, which it has not changed since it agreed to a record cut in production in December 2008 in the aftermath of economic crisis.
Since then the target has become obsolete as the economy recovered and Saudi Arabia and others in OPEC unilaterally raised supplies. Most officials in the group say supplies are adequate, although a delegate from one of OPEC’s Gulf countries has suggested OPEC could raise its output target in Vienna.
In May, Saudi Arabia has boosted supply by 100,000 bpd from an upwardly revised April level, partly due to increase demand from the country’s power plants, the survey found.
Nigerian supply has risen as Royal Dutch Shell added extra cargoes of Bonny Light crude to export programmes for April and May as production surprised to the upside. Iraqi output, excluded from OPEC output agreements, was slightly higher with exports in the country’s south climbing to 1.7 million bpd due to higher production at the Rumaila field which BP Plc and CNPC are developing.
Among the countries with lower output, Libya’s production posted a further decline of 50,000 bpd in May to average 200,000 bpd. Until violence broke out earlier this year, output had been running near 1.6 million bpd. Angolan supply continued to reflect the impact of field maintenance, technical problems and declining output at some of the country’s older fields., participants in the survey said.
Initial estimates suggest little impact on supply to the market from maintenance work at the Upper Zakum field in the United Arab Emirates. OPEC has not officially changed its output policy since cutting output by a record 4.2 million bpd in December 2008 to 24.84 million bpd for 11 members, all except Iraq. They produced 26.23 million bpd in May, according to the Reuters survey.
The group does not provide timely official production figures, so the oil industry relies on supply estimates from news agencies, consulting firms and organisations such as the International Energy Agency.