OPEC-10 production has not fallen anywhere near the 25.8 million b/d target that came into effect at the beginning of February and has edged up over the past three months. The latest estimates leave OPEC-10 production more than 900,000 b/d above the notional ceiling. The biggest single output increase came from Iraq, thanks to a recovery in exports from the south and some exports of northern crude from Ceyhan on the Turkish Mediterranean.
"This is terrific news for consumers, as the world is going to need this oil as we head toward the fourth quarter, the period in which demand is at its highest," said John Kingston, Platts Global Director of Oil. "However, with the increase coming from Iraq, it does raise the question over whether such a jump can be sustained." Nigerian output also showed some recovery, with Shell inching its way back into the 380,000 b/d Forcados field and sending some workers back to abandoned flow stations in the remote swamps around the Forcados terminal. The field was shut in during February 2006 after militants bombed the export terminal as part of a campaign to wrest greater control of the country's oil resources.
Other, smaller increases came from Angola, Iran, Qatar and the UAE. OPEC is next scheduled to meet on September 11 in Vienna but has given no indication that, despite the upward drift in production, it may heed calls from the International Energy Agency and the world's biggest oil consumer, the United States, to boost output ahead of the winter. Algeria's Minister for Energy and Mines Chakib Khelil said last Saturday that there was, at the moment, "no reason to increase or to decrease production," but that OPEC would review the market at its upcoming meeting.
"If there is a need to increase production, we will increase and if there is a need to decrease, we will decrease," he said, reiterating the view put forward by other top OPEC officials that there is not a shortage of crude but of refining capacity.
