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NICOSIA, Sept 14: The Opec cartel produced 2.06 million barrels per day (bpd) over quota agreements in August, the Middle East Economic survey reports in its Monday edition.
Production by the 10 member states, minus Iraq, rose by 240,000 bpd last month to 23.760 million bpd, the industry newsletter says.
However total Opec production, including Iraq, fell 90,000 bpd to 25.26 million bpd from 25.35 million in July due to declines in output from Baghdad and Tehran, which outweighed a sharp increase from Venezuela and small rises in the five other states.
The figures demonstrate a continuing deterioration in quota compliance with the Opec 10 increasing production for the sixth consecutive month, the Cyprus-based weekly says.
MEES notes that output from Caracas surged to the highest average level this year at three million bpd — 503,000 bpd over quota.
Saudi Arabian production pursued its slow rise, edging 50,000 bpd higher in August to 7.6 million bpd, or 547,000 bpd over quota.
The problem of over-production is increasing and will be one of the pressing issues on the agenda at the Opec ministrial meeting in Osaka, Japan, on September 19, MEES says.
Ministers are still divided over whether or not to boost production quotas, but MEES points out that markets are capable of absorbing two million bpd of crude over the current ceilings set on January 1, as current over-quota output shows.
Algeria was the largest over-producer at 25 per cent over quota (870,000 bpd for a quota of 693,000 bpd), followed by Venezuela at 20 per cent over and Qatar 15 per cent over (650,000 bpd for a quota of 562,000).
Iranian production fell to 3.35 million bpd from 3.56 million in July.
Output from Iraq continued to drop due to lower exports, falling cross-border trade and domestic consumption.
Indonesia again failed to meet its quota while Kuwaiti production has peaked due to operational constraints, the weekly says.
UNITED NATIONS: Venezuelan President Hugo Chavez said on Friday that the Opec producer cartel could raise oil production if possible military conflict in Iraq creates a supply shortfall.
This could lead Opec to decide to avoid an imbalance in the world...that Opec would decide to shoulder some of the shortfall that would be generated. That is something that is being discussed, Chavez told a press conference.
Undoubtedly an attack on Iraq would have an impact, a considerable impact. It could shift the balance we have achieved in the past few months in the oil markets regarding supply and demand, Chavez added, after his speech to the UN General Assembly.
Russia, Europe and key Arab states piled pressure on Iraq on Friday to readmit UN weapons inspectors to avert possible US-led military action.
Venezuela, the world’s fifth biggest oil exporter, has been among several Opec producers who have called for the cartel to keep stiff production curbs in place at next week’s meeting in Osaka, Japan. Consumer countries are concerned that oil prices could spike during the northern winter when heating demand rises.—AFP/Reuters
