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OPEC oil output rise in October undershoots target


© Reuters. FILE PHOTO : This illustration shows a 3D-printed oil pump jack in front of an OPEC logo. It was captured on April 14, 2020. REUTERS/Dado Ruvic/File Photo

Alex Lawler

LONDON (Reuters – The OPEC oil output increase of October was below the deal’s target, a Reuters survey showed on Monday. This is because involuntary production outages by smaller producers have offset rising supplies from Saudi Arabians and Iraq.

According to the survey, the Organization of the Petroleum Exporting Countries, OPEC, pumped 27.50 millions barrels per daily (bpd), in October. This was a jump of 190,000. bpd over the previous month, but less than the 254,000 permitted increase under the supply agreement.

OPEC states, along with their allies (a group known as OPEC+), are relaxing the output cuts that were made in 2020 to meet demand recovery from the coronavirus epidemic. However, some of the members may not be able to deliver the promised boosts due lack of capacity.

In case of a resounding defeat in the fight against COVID-19, the OPEC+ alliance will be cautious about pumping too many oil.

Louise Dickson, Rystad Energy analyst, stated that OPEC+ would likely remain behind demand rather than jumping ahead to get burned.

Oil prices have been supported by supply constraints. They are now trading at $85 per barrel, close to three-year highs, and prompting consumers in the United States to ask producers for more oil.

According to Reuters, the OPEC+ deal allowed for a 400,000 bpd increase in production from October by all members. The 10 OPEC member countries covered by the agreement share about 254,000 bpd.

OPEC has increased its compliance to the pledged reductions by 118%, compared with 114% a month ago. This is despite the output falling short of the expected increase.

OPEC+ is meeting on Thursday, to discuss its policy. It will likely to reconfirm plans to increase monthly.


Two of OPEC’s largest producers, Saudi Arabian and Iraqi, saw the biggest increases in October. Both countries boosted their output a lot as per the agreement.

Kuwait, Algeria, and the United Arab Emirates all saw an increase due to their increased October quotas. Exports from Angola grew in October despite their decline.

According to the survey, output declined in Gabon and Equatorial Guia, while it did increase in Republic of Congo. This was due to an inadequate capacity.

Nigeria was the country with the largest output drop, at 70,000 bpd. This was due to the disruption of output following a September recovery.

After a shut-down of a pipeline, ‘The Royal Dutch Shell (LON) in Nigeria was declared Force Majeure for loadings Bonny Light crude.

A pipeline leak caused the country of Libya to suffer its second biggest decline.

The output in Iran saw little improvement in October, even though it has seen an increase in exports over the last quarter of 2015 despite U.S. sanction. It is expected that talks on a reopening of the 2015 nuclear deal between Iran and world powers will resume. This would permit a more rapid recovery in exports.

According to the survey, Venezuelan production increased by a slight amount, due in part to Iranian condensate arriving at Caracas to assist it with converting its heavy oil into crude for export.

The Reuters survey aims at tracking supply to the market. It is based upon shipping data from external sources such as Refinitiv Eikon flows, Refinitiv Eikon shipping data and information from tanker trackers like Petro-Logistics or Kpler as well as information supplied by oil companies, OPEC, and consultants.