«Aleqtisadiah» from Riyadh
Saudi crude oil production rose to 10.424 million bpd in August from 10.288 million bpd in July, an OPEC source said yesterday.
According to Reuters, the source said that the supply of Saudi crude last month was amounted to 10.467 million barrels per day compared to 10.380 million barrels per day in July.
The volume of supply in the market locally and for exporting may differ from the volume of production depending on the movement of crude from and to storage sites.
"This reflects the needs of the customers and is in line with the OPEC agreement," the source said, referring to the agreement between the cartel and the independent led by Russia to curb oil production.
The drop in production in July was due to a drop in Saudi exports.
OPEC and its allies pledged at a meeting on June 22-23 to return to a 100 percent commitment by agreeing to cut their total production by 1.8 million barrels per day, which came into effect in January 2017, after continuing production below target for months in Venezuela and other countries, led the commitment level to more than 160 per cent.
OPEC's oil production rose last month to its highest level in 2018 as Libya's output recovered and southern Iraq's exports reached a record high, despite the shrinking of Iranian shipments due to US sanctions that is curbing the increase.
The Reuters survey showed that the Organization's 15 countries pumped 32.79 million barrels per day last month, an increase of 220 thousand barrels per day compared to the revised report for the month of July.
OPEC agreed with allies in June to increase output as US President Donald Trump urged producers to compensate for losses caused by renewed sanctions on Iran and cut prices this year to $ 80 a barrel for the first time since 2014.
Saudi Arabia, which had promised a "calculated" increase in production, said that the decision would translate into an increase in production of about 1 million bpd.
However, OPEC's commitment to production cuts rose to 120 per cent in August from 117 per cent in July, according to the survey, as the additional supplies have not lost the impact of losses in Iran and production has declined in Venezuela and Angola in full.
The largest increase in supplies this month came from Libya, whose output is still volatile due to unrest. The production in El-Sharara oil field, the largest in the country, increased after the restart of a control station that had been closed because of the kidnapping of two workers, while other fields pumped additional supplies of crude.
The second largest increase came from Iraq, with exports reaching a record high, making Iraq the least-committed member of the OPEC deal in August.
According to the survey, Saudi Arabia continued to cut supply in July to reach 10.40 million barrels per day. It added, "production rose to 10.48 million barrels per day in August, which is still below the record in June at 10.60 million barrels per day."
Nigeria's output has risen by 30,000 bpd, as Nigeria, like Libya, is exempt from an OPEC supply cut because its output is often subject to unplanned cuts due to unrest and conflict.
According to the survey, Kuwait and the UAE kept their production stable last month after increasing supplies in July following the OPEC agreement.
Among the countries that dropped production, the biggest drop was in Iran by 150,000 barrels per day, and exports fell due to companies' reluctance to buy due to the return of the US sanctions.
Production has also fallen in Venezuela, where the oil sector suffers from funding shortages due to the economic crisis, and Angola due to the natural decline in oil fields.
Despite the decline, OPEC production in August rose to its highest level since September 2017. This reflects in part the Congo's accession to OPEC in June, and not just the increase from OPEC members.
Before Congo joined the Organization, OPEC pointed out that the target production for 2018 is at 32.78 million barrels per day.
According to the survey, "OPEC", without the Congo, pumped about 310 thousand barrels per day, below that target in August.
The survey aims to trace the supplies that are pumped into the market and is based on offshore data provided by Thomson Reuters and information provided by sources in oil companies, OPEC and consulting firms.
Oil market analysts have lowered their 2018 forecasts for the first time in almost a year as concerns over the impact of growing trade tensions on demand for crude, although shrinking supplies, especially from Iran, will curb losses.
A poll of 45 economists and analysts predicted that the price of global benchmark crude would reach an average of $ 72.71 per barrel in 2018 that is down 16 cents from $ 72.87 in the July’s poll.
This is over $ 71.96 on average since the beginning of this year, and is expected to reach $ 72.58 per barrel on average in 2019.
West Texas Intermediate crude futures are expected to post $ 67.13 per barrel on average in 2018, compared to $ 67.32 a barrel on average last month and $ 66.40 a barrel on average.
Oil prices fell at the end of last week on fears of a deepening trade war between the United States and China. Although, US sanctions on Iran's oil exports and Venezuela's oil production have come close without further losses.
Brent crude futures were $ 77.64 a barrel, down 13 cents from the previous settlement price. West Texas Intermediate crude (US $ 69.86) is down 39 cents, with a decline of 0.58 per cent.
Analysts warned that trade disputes between the United States and other major economies, especially China and the European Union, may begin to put pressure on economic growth and then demand for fuel.
With Venezuelan supplies down sharply and US sanctions against Iran, which will target Tehran's oil exports from November, Crude markets in August recorded a rise of over 4 per cent in Brent and 2 per cent in the WTI price.
The US Energy Information Administration said in a monthly report released yesterday, "US crude oil production rose by 231,000 bpd to reach 10.674 million bpd in June from 10.443 million bpd in May."
This is the highest monthly level of total US oil production, and the increase came with the rise in production in Texas and the Gulf of Mexico.
