OPEC January crude output rises as Iraq pumps at record pace
MARK SHENK
VIENNA, Austria (Bloomberg) -- OPEC oil production rose in January as record Iraqi output helped drive prices near six-year lows.
Production by the Organization of Petroleum Exporting Countries climbed 483,000 bopd to 30.905 MMbopd this month, led by gains in Iraq, Saudi Arabia, and Angola, according to a Bloomberg survey of oil companies, producers and analysts.
Output rose even as oil futures dropped to the lowest level since 2009. OPEC left its production quotas unchanged at a November meeting, prompting speculation that the group will let prices slide low enough to slow U.S. output that’s climbed to the highest in three decades.
“There’s clearly a battle for market share among the members of the group,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone on Friday. “The Iraqis feel entitled to a greater share of the total and have been the most aggressive at discounting.”
Brent crude for March settlement rose 22 cents to $49.35/bbl the London-based ICE Futures Europe exchange at 9:43 a.m. in New York. Brent, the benchmark for more than half the world’s oil, touched $45.19 on Jan. 13, the lowest since March 2009.
Iraqi Production
Iraqi production rose 200,000 bopd to 3.9 MMbopd this month, the biggest gain after Saudi Arabia, according to the survey. Output climbed as the country added growing Kurdish supplies to its exports, while southern oilfields remain unscathed by Islamic State militants. Iraq is OPEC’s second-biggest producer.
Crude output in Iraq hit a record 4 MMbpd, Oil Minister Adel Abdul Mahdi said in Baghdad on Jan. 18. The country needs to increase oil production because tumbling global prices have reduced government revenue by about 50%, Deputy Prime Minister Rowsch Nuri Shaways said at the World Economic Forum in Davos, Switzerland, on Jan. 21.
Last month’s total was revised 183,000 bopd higher to 30.422 MMbopd because of changes to the Iraqi and Ecuadorian estimates.
Output in Saudi Arabia, OPEC’s top producer, climbed 220,000 bopd to 9.72 MMbopd. Shipments to China increased as lower prices encouraged crude storage, according to a person familiar with the matter.
New King
Oil prices continued to slide after the death of King Abdullah on Jan. 23. His successor, King Salman, calmed the market by saying that he will continue his predecessor’s policies and retaining Oil Minister Ali Al-Naimi.
The desert kingdom won’t balance global crude markets by itself even as prices fall “too low for everybody” Khalid Al- Falih, the CEO of Saudi Arabian Oil Co., said at a conference in Riyadh on Tuesday. Al-Naimi has said producers outside of the group should trim their output first.
Saudi Aramco and partner Sinopec Group shipped the first gasoline cargo from the new Yasref refinery in Yanbu refinery this month. The plant on Saudi Arabia’s Red Sea coast will have crude-processing capacity of 400,000 bpd.
“The Saudis continue to play a long-term game,” Kilduff said. “They want to squeeze other producers out.”
Angolan production increased 190,000 bopd to 1.81 MMbopd, the third-biggest advance in January. Eni began first production from the West Hub development project in Block 15/06 in December.
Libyan output fell 150,000 bopd to 300,000 in January, the lowest level since June and the biggest decline in the survey. Production has slumped since the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule. The country pumped 1.585 million in January 2011.
OPEC ministers are scheduled to convene June 5 in Vienna.
