Opec production drops further to 2-1/2-year low

Supply from the Organisation of the Petroleum Exporting Countries has averaged 29.64 million barrels per day (bpd), down from a revised 29.70 million bpd in October, according to the survey based on shipping data and information from sources at oil companies, Opec and consultants.

Outages in Libya and Nigeria have weighed on Opec output this year, offsetting extra US shale oil and other non-Opec supply and helping to keep oil prices well above Saudi Arabia’s preferred level of $100 a barrel.

“The market is well supplied but not overly well supplied. Otherwise prices would be plunging,” said Sam Ciszuk, an analyst at the Swedish Energy Agency. “Libya is in a complete mess and there’s been some positive signs about Iran, but I don’t think the market sees any actual important volumes coming out of that in the coming few months.”

In November, protests in Libya, maintenance in Nigeria and lower Saudi supply outweighed a partial recovery in Iraqi exports and a small rise in Iranian shipments.

Opec’s November output is the lowest since May 2011, when the group pumped 28.90 million bpd according to Reuters surveys, and leaves supply below Opec’s nominal target of 30 million bpd for a second month. Output dropped below 30 million bpd in October for the first time since it came into effect in January 2012.

Opec meets on Wednesday in Vienna to consider adjusting the 30 million bpd target and, with oil well above $100, is likely to leave it unchanged, say delegates who attend meetings.

“I do not think there will be any change,” a delegate from one of Opec’s Gulf members said. “Prices are OK for everyone, not really too high or too low.”

Saudi Arabia, industry sources say, trimmed output due to a reduced requirement for crude to fuel domestic power plants and to lower exports, the survey found.

The kingdom has scaled back supplies from 10.05 million bpd in August, the highest since records began in 1980, according to figures from the US Energy Information Administration.

In Libya, protests at fields and terminals limited supplies. Output averaged 350,000 bpd in November and by the end of the month was around 250,000 bpd, the survey found, a fraction of the 1.4 million bpd it was pumping earlier this year.

In Nigeria, where output has been increasingly hit by spills and theft from pipelines, supply declined due to planned maintenance at Royal Dutch Shell’s Bonga oilfield. Iraq boosted oil exports in November to 2.37 million bpd, the survey found. Although infrastructure work at its southern terminals restricted supplies, exports of Kirkuk crude shipped through northern Iraq rose.