Opec output rebounds on Saudi recovery
Opec crude production rose by over 1mn b/d last month, rebounding from drone and missile attacks in Saudi Arabia that pushed the group's September output to an eight-year low.
Opec production increased to 29.76mn b/d in October from an upwardly revised 28.71mn b/d in September. Compliance among members bound by Opec's production restraint agreement with non-Opec allies was 145pc last month, broadly in line with the average of the previous nine months.
The sharp increase in production was driven by Saudi Arabia's swift recovery from the mid-September attacks on the Abqaiq processing plant and Khurais oil field, which temporarily shut in 5.7mn b/d of the country's output. Saudi refineries reduced runs in the wake of the attacks but were operating at full capacity by late October. Tracking data indicate Riyadh continued buying high-sulphur fuel oil (HSFO) from Europe in October. The country has relied heavily on fuel oil for power generation since the attacks, analysts say.
Saudi crude output averaged a revised 8.7mn b/d in September — the lowest since March 2011 — but regained 1.2mn b/d to reach an eight-month high of 9.9mn b/d last month. Argus tracking data show crude sailings from Saudi ports increased by around 790,000 b/d to 7.24mn b/d in October — although the rise in total exports is likely to have been lower, as the country relied extensively on shipments from overseas storage in September. Saudi Arabia steadily replenished domestic crude stocks last month, analysts say.
Venezuela's production rose by 120,000 b/d — its largest monthly increase this year — to a three-month high in October, as the country boosted crude and oil product shipments to close political ally Cuba, a rare outlet for Caracas amid US sanctions. But deepening civil unrest constrained production in Ecuador. The country — which will leave Opec on 1 January — lost 120,000 b/d last month, after demonstrators pushed state-owned PetroEcuador to suspend operations at its 360,000 b/d Sote crude pipeline and declare force majeure on exports on 9-20 October.
Anti-government demonstrations in Iraq have recently spread to oil infrastructure but have not affected production. Iraqi output shed 20,000 b/d last month amid maintenance at the Iraq-Ceyhan pipeline in early October and work at one of the single-point moorings at the Basrah Oil Terminal, but the country was still 140,000 b/d above its agreed production ceiling. Fellow serial quota-buster Nigeria improved compliance last month, producing 100,000 b/d above its adjusted 1.77mn b/d quota, after surpassing it by 160,000 b/d in September.
Mixed views have emerged over the outlook for the production cut agreement, ahead of Opec and non-Opec meetings in Vienna next month.
"The picture for 2020 is gradually looking much brighter than when we met earlier in the year," Opec secretary-general Mohammed Barkindo said this week. Iranian oil minister Bijan Namdar Zanganeh had said earlier that Opec and its allies are discussing the possibility of deepening the production cuts.
Opec wellhead production | mn b/d | |||
Oct | Sep | Target | Compliance (%) | |
Saudi Arabia | 9.90 | 8.70* | 10.31 | 228 |
Iraq | 4.65 | 4.67 | 4.51 | 2 |
Kuwait | 2.64 | 2.65 | 2.72 | 199 |
UAE | 3.10 | 3.07 | 3.07 | 71 |
Algeria | 1.02 | 1.02* | 1.03 | 116 |
Nigeria | 1.87 | 1.93 | 1.77 | -75 |
Angola | 1.38 | 1.46 | 1.48 | 315 |
Congo (Brazzaville) | 0.31 | 0.32 | 0.32 | 150 |
Gabon | 0.22 | 0.20 | 0.18 | -550 |
Equatorial Guinea | 0.14 | 0.15 | 0.12 | -200 |
Ecuador | 0.44 | 0.56 | 0.52 | 569 |
Opec 11 | 25.67 | 24.73 | 26.03 | 145 |
Iran | 2.17 | 2.19 | na | na |
Libya | 1.15 | 1.14 | na | na |
Venezuela | 0.77 | 0.65 | na | na |
Total OpecϮ | 29.76 | 28.71 | ||
*revised †Iran, Libya and Venezuela are exempt from the deal | ||||
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