OPEC Oil Output Falls in February, But Still Above Target

Platts Survey: OPEC Oil Output Falls in February, But Still Above Target
Platts 3/9/2007

The 10 members of the Organization of Petroleum Exporting Countries (OPEC) bound by the group's output agreements produced an average 26.62 million barrels of crude oil per day in February, a Platts survey showed March 8. This is down 330,000 barrels per day (b/d) from January's 26.95 million b/d but still well above the group's new 25.8 million b/d production target established last month.

Total OPEC production, including that of Iraq and new member Angola, averaged 30.18 million b/d, up 70,000 b/d from January, the survey showed. Iraq is not bound by OPEC's output agreements and Angola has yet to be assigned a production target.

Among the OPEC-10, Nigeria was the only country not to reduce output. Algeria, Libya, Qatar and the UAE each cut by 10,000 b/d. Indonesia and Venezuela each reduced output by 20,000 b/d. Slightly bigger cuts of 50,000 b/d each came from Iran and Kuwait, while Saudi Arabia sliced 150,000 b/d off January production to produce an average 8.6 million b/d in February.

"OPEC's focus may soon begin to shift toward loosening its hold on supplies toward the third quarter," suggests Platts Director of Oil John Kingston, especially if oil prices stay strong. "With the price of benchmark West Texas Intermediate firmly in the vicinity of $60, it's doubtful that OPEC will seek to significantly tighten the screws on the market." Kingston says it will be particularly interesting to see what Iraq and Angola produce over time.

Iraq, still struggling to rebuild its oil industry after years of UN sanctions and the US-led invasion of 2003, boosted its output to just above 2 million b/d from 1.66 million b/d in January as exports recovered after January disruption.

Angola, which joined OPEC in January, has yet to be asked to limit its oil output. According to survey data, the oil exporter boosted production to 1.55 million b/d in February from 1.5 million b/d in January.

OPEC ministers agreed last October to remove 1.2 million b/d of crude from world oil markets from November, saying supply was well in excess of demand and setting a production target of 26.3 million b/d. In December, they agreed to expand the cut by 500,000 b/d from February. The cuts were based on estimated September production of 27.5 million b/d. The target, as of February 1, is 25.8 million b/d.

The latest survey shows that the OPEC-10 have cut supply by more than 1 million b/d since September, when Platts estimates pegged production at 27.81 million b/d.

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OPEC-10 Oil Output Down 205,000 bpd in Feb

OPEC-10 Oil Output Down 205,000 bpd in Feb; Jan Revised Down
by Anna Raff
Mar 7, 2007

NEW YORK - The Organization of Petroleum Exporting Countries cut its crude oil output further in February following a curb of production in January, the U.S. Department of Energy said Tuesday.

The 10 OPEC members subject to production quotas, not including Iraq and recent member Angola, produced 26.455 million barrels a day, down 205,000 barrels a day from January levels, according to a report by the Energy Information Administration. The EIA is the statistics arm of the Energy Department.

In addition, the EIA revised downward its estimate of OPEC-10 January output. According to the new estimate, oil production fell 220,000 between December and January to 26.66 million barrels a day.

'The OPEC-10 made about half of the targeted 1.2 million barrels per day production cut by January 2007,' the EIA said its monthly Short-Term Energy Outlook. 'OPEC-10 production could increase by 1 million bbl/d by the fourth quarter of 2007 when compared with first-quarter levels.'

February's output was 575,000 above the 10 members' combined production target of 25.88 million barrels a day for the month.

In a bid to buoy sliding oil prices, OPEC agreed to cut output from these ten members by 1.7 million barrels a day in two tranches starting Nov. 1. The second phase took effect Feb. 1.

According to a Dow Jones Newswires survey, the 10 members of the Organization of Petroleum Exporting Countries that have output quotas cut production in February by 1.6% on month to 26.45 million barrels a day. This is in line with the EIA's estimate.

OPEC is scheduled to meet March 15 in Vienna, and several countries have already said that another production cut is unlikely because oil prices have stabilized around $60 a barrel, a level believed to be acceptable to most OPEC countries.

http://realtimenews.slb.com/news/story.cfm?storyid=640558
© 2007 Dow Jones Newswires.

Non-OPEC Oil Supply Plagued by Uncertainty and High Costs

Xinhua Financial News
3/6/2007

High costs and the uncertainty of the oil market have prompted the Centre for Global Energy Studies (CGES) to revise downward its forecast for supply growth from non-OPEC producers.

The CGES calculated that actual growth in non-OPEC supplies had been over-estimated by an average of more than 400,000 bpd in recent years, said the report entitled "Non-OPEC production: Rising costs slow output growth."

Increases in total non-OPEC production will reach 1.07 million bpd in 2007 compared with 456,000 bpd last year, said the CGES in its latest forecast.

"The problem is that new projects must first compensate for output declines at existing fields before they can add to overall capacity," explained the report. Unforeseen technical problems, unexpected project delays, bad weather, accidents and geopolitical risks forced the downward revision by the CGES. But, the London-based research center said, compared to 2006, 2007 will be a banner year for non-OPEC output.

"If you add up all projects which should come upstream this year the figure is even more than the 1.2 million bpd which the International Energy is forecasting, but you have to assume they don't come upstream as planned," said Dr Leo Drollas, head of the CGES oil analysis.

He added with the uncertainty of the oil market, "even we could be wrong. If the figure is reduced to 500,000 bpd, that could push prices higher."

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