OPEC overproduction 2.67m bpd in September

OPEC overproduction 2.67m bpd in September

Dow Jones, Manama, Bahrain

Overproduction of crude oil by members of the Organization of Petroleum Exporting Countries, excluding Iraq, in September was estimated at 2.67 million barrels a day, or 12.3 percent over quota, the weekly Middle East Economic Survey reported in its latest issue to be released Monday.

MEES estimated that oil production by the OPEC 10 rose by 610,000 barrel per day in September to 24.370 million barrel per day from a month earlier. This compares with the official output quota agreement of 21.701 million barrel per day.

Total production of the group, including Iraq, rose 930,000 barrel per day to 26.19 million barrel per day in September from 25.26 million barrel per day in August, underpinned by a sharp rebound in Iraqi exports driven by the removal of surcharges by Iraq authorities at the beginning of last month, MEES said.

The sharp rise in OPEC 10 production was due to increases across the board, with the exception of Indonesia and the United Arab Emirates, MEES added. The remaining eight countries produced oil in September at their highest level so far this year.

Taken collectively, the data shows that quota compliance continues to deteriorate, with September marking the seventh consecutive month where oil production has increased for the OPEC 10, the newsletter said.

The increase for most countries continues to be gradual, but September saw a particularly sharp jump in output by Iran and Venezuela.

MEES said Iran's September production was 3.7 million barrel per day, comprising exports of 2.25 million barrel per day, while deliveries to domestic refineries accounted for 1.45 million barrel per day.

Venezuelan production, which includes crude oil and synthetic crude, rose to 3.1 million barrel per day in September, building on the substantial increase seen the previous month.

Iraq, which is not party to OPEC quotas, saw its September production rise to 1.82 million barrel per day amid rising exports after the suspension of marketing surcharges and the resumption of some of its cross-border trading that had dwindled in recent months.

MEES said that Iraqi oil exports to Syria are now running at 200,000 barrel per day, with truck deliveries to Turkey having restarted by government-controlled companies and averaging 40,000 barrel per day in the month.

These, combined with 20,000 barrel per day of sales to Persian Gulf customers, 110,000 barrel per day of sales to Jordan and 350,000 barrel per day of domestic consumption accounts for the country's higher volumes.

The MEES survey showed that the countries that have publicly declared their intent for an upwards review of their quota allocation are exceeding their current quotas by the largest amount in percentage terms.

Thus, Algeria, Venezuela and Nigeria exceeded their quotas by 30 percent, 24 percent and 12 percent respectively. In volume terms, Saudi Arabia overproduced by 647,000 barrel per day, closely followed by Venezuela, at 603,000 barrel per day and Iran by 514,000 barrel per day.