Oil output from the Organisation of Petroleum Exporting Countries (OPEC) fell to a 20-year low of 32.52 million barrels per day (bpd) in May, from 32.64 million bpd it recorded in April.
The slide in OPEC member countries’ crude oil production may not be unconnected with the constant attacks from the Niger Delta Avengers.
Nigeria currently pumps under 1.5 million bpd – less than Angola – and well below the 2.2 million bpd assumed in the 2016 state budget as a result of attacks on Chevron facilities, a development that may have forced Chevron to suspend operations.
Other attacks have forced Shell and ENI to declare force majeure on exports of Bonny Light, Forcados and Brass River crude, while an accident at an ExxonMobil terminal put Qua Iboe under force majeure. Fears of loading delays and cancellations have made international buyers reluctant to seek Nigerian crude.
Meanwhile, OPEC is slated to meet in Vienna, Austria tomorrow to effectively discuss the supply restraint on which producers could not agree. Those disruptions are supporting oil prices, which are close to 2016 highs, and the rally has reduced the urgency of any new attempt at deliberate supply curtailment.
A rise in supply from Saudi Arabia plus Iran suggests the group’s top producers remain focused on market share, following the failure of an initiative in April between OPEC and non-OPEC producers to support prices by freezing output. “There is a tiny chance of a bullish surprise but as things stand right now, the odds are the continuation of OPEC’s market-share policy,” said David Hufton of Oil Brokers PVM.
Meanwhile OPEC is looking forward to picking Dr. Mohammed Sanusi Barkindo, a former Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), as its next Secretary General, reliable sources familiar with the development said Tuesday in Abuja.
Barkindo was nominated in March this year by the Nigerian government for the position. He was GMD of the NNPC from 2009 – 2010 and may be appointed on Thursday during OPEC’s Ministers meeting in Vienna.
OPEC output has surged since the group abandoned in 2014 its historic role of cutting supply to prop up prices, in a shift led by Saudi Arabia. There are more indications, however, that some producers are also struggling to maintain supply.
May’s biggest decline occurred in Nigeria due to militant attacks on the country’s oil industry. The disruption has pushed output to its lowest in more than 20 years.
Libyan output declined further due to a blockage of shipments from the port of Hariga. Loading difficulties and other problems made a further dent in Venezuela’s supply, sources in a survey said.
Iraq, the fastest source of OPEC production growth in 2015, also pumped less as power outages limited southern exports, which in April were at a near-record.
Of the countries boosting output, Iran managed a further increase after the lifting of Western sanctions in January.
Culled from Sun
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