Oil production jumps

LONDON – OPEC said on Wednesday its oil production jumped in June and forecast world demand for its crude will decline next year as rivals pump more, pointing to a market surplus in 2018 despite an OPEC-led output cut.

Giving its first 2018 forecasts in a monthly report, the Organization of the Petroleum Exporting Countries said the world will need 32.20 million barrels per day (bpd) of crude from its members next year, down 60,000 bpd from this year.

OPEC said its oil output in June rose above the demand forecast, led by gains in Libya and Nigeria, two members exempt from the cut aimed at eliminating excess supply.

OPEC officials nonetheless remain upbeat on the outlook.

“We remain very optimistic … (about) helping the market to rebalance itself,” OPEC secretary-general Mohammad Barkindo said at an industry conference in Istanbul.

Oil LCOc1 rose above $US48 ($F98) a barrel on Wednesday as a US report of falling inventories in the US raised hopes that the glut is easing. OPEC referred to an “ongoing rebalancing” of the market.

Under the supply deal, OPEC is curbing output by about 1.2 million bpd, while Russia and other non-OPEC producers are cutting half as much, until March 2018.

OPEC production has increased in recent weeks, in part because of the recovery in Libya and Nigeria, which were exempted from the supply cut as domestic conflict had curbed their output.

OPEC said its output rose by 393,000 bpd in June to 32.611 million bpd, according to figures from secondary sources the organisation uses to monitor supply.

The gain was led by Nigeria and Libya, with extra barrels also from Saudi Arabia and Iraq.

The figures mean OPEC has complied 96 per cent with the cutback pledge, according to a Reuters calculation, down from more than 100 per cent in May but still high by OPEC standards.

“We are fully satisfied that member countries are maintaining a very high level of conformity,” Mr Barkindo said.

More Stories