OPEC’s oil output hits highest since October

                                     
The Organisation of Petroleum Exporting Countries (OPEC) yesterday said its oil supply has jumped in March to its highest since October as Iraq’s exports rebounded after bad weather and Saudi Arabia pumped at close to record rates.

Nigeria is a member of OPEC, pumping about 2.2million barrels per day to the cartel’s basket. The increase from the group adds to excess supply in the market, despite some signs that the halving of crude prices since June last year is encouraging higher oil demand.
OPEC supply has risen in March to 30.63 million barrels per day (bpd) from a revised 30.07 million bpd in February, according to Reuters survey based on shipping data and information from sources at oil companies, OPEC and consultants.
An analyst at Commerzbank in Frankfurt, Carsten Fritsch, said: “Demand might be a bit stronger than expected at the beginning of the year, but I don’t think it is strong enough to absorb the entire oversupply. There’s still oversupply in the market, which is reflected in the inventory builds.”
Besides Saudi Arabia, the main reasons for the rise are the resolution of involuntary outages – Iraq lifted exports due to improved weather and Libya managed to nudge production higher despite unrest.
If the total remains unrevised at 30.63 million bpd, March’s supply would be OPEC’s highest since 30.64 million bpd in October 2014, based on Reuters surveys.
Saudi Arabia was the driving force behind OPEC’s refusal last year to prop up prices by cutting its output target of 30 million bpd, in a bid to discourage more costly rival supplies. The group holds its next meeting in June, and comments from OPEC officials suggest it will not alter the policy.
In March, the largest increase has come from Iraq, whose southern oil exports recovered following bad weather that delayed tanker loadings, according to shipping data and industry sources. Northern exports were slightly lower.
Based on this survey, Iraq’s exports have come close to December’s record high of 2.94 million bpd, depending on whether tankers at the southern ports on earlier on Tuesday actually depart in March. Iraq was hoping to reach 3 million bpd of exports this month.
Saudi Arabia has increased output to within a whisker of 10 million bpd on average in March, sources in the survey said, due to higher demand from export customers and an increased local requirement in new oil refineries.
“The Saudis say they are responding to higher demand and I tend to believe that, looking at the strong refining margins in Singapore,” said an oil consultant. Margins are well above the annual average in Asia, which buys the bulk of Saudi Arabia’s exports.