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OPEC pumps below target

OPEC pumps below target
Output from OPEC members bound by supply targets fell by 400,000 barrels per day.

Output from OPEC members bound by supply targets fell by 400,000 barrels per day.

Output from OPEC members bound by supply targets fell by 400,000 barrels per day (bpd) in December, consultant Petrologistics said, as the group more than complied with a deal to try to boost oil prices. Supply from 11 exporters was expected to average 27.1 million bpd in December, down from about 27.5 million bpd in November, said Conrad Gerber of Petrologistics, an established tracker of oil tankers.

The Organization of the Petroleum Exporting Countries had pledged to lower supply to 27.3 million bpd from Nov. 1 in a pact that excluded only Iraq, which does not have a production target, and Indonesia, which leaves OPEC at the end of the year.

"They are taking off barrels, there is no doubt about that," Gerber told. "The reductions from the main Gulf producers have been drastic."

Supply is likely to decline further in January after OPEC agreed earlier this month to curb production by an additional 2.2 million bpd from Jan. 1.

OPEC, source of roughly a third of the world's oil, agreed in late October to lower output by 1.5 million bpd from Nov. 1 following an earlier deal to trim supply by about 500,000 bpd.

Top world exporter Saudi Arabia and fellow Gulf producer the United Arab Emirates have led the cutback in December.

Saudi Arabia was expected to lower output by 300,000 bpd to 8.2 million bpd, Gerber said. Output from the UAE was expected to be down 130,000 bpd at 2.2 million bpd.

There was little sign of supply curbs from Iran and Venezuela, which need relatively high prices to balance their budgets and are usually among the first in OPEC to support measures likely to boost the cost of oil.

Iran, OPEC's second-largest producer, is forecast to increase supply by 170,000 bpd to 3.85 million bpd, while Venezuelan output is steady at 2.32 million bpd, Gerber said.

Output from Iraq, which is excluded from OPEC's agreements to limit supplies, is forecast to rise to 2.45 million bpd from 2.27 million bpd in November, he said, as a result of higher exports from the north of the country.

Including Iraq and Indonesia, OPEC production in December was forecast to decline by about 200,000 bpd to 30.4 million bpd.

The group has cut output in response to a collapse in the oil price from a record above $147 in July to around $40 a barrel as the slowing world economy erodes demand.

Petrologistics measures OPEC supply, which excludes oil produced and placed in storage, by tracking oil tanker shipments. OPEC does not issue timely estimates of its own production.


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