OPEC oil output falls further on Libya

By Alex Lawler

LONDON (Reuters) – Top world oil exporter Saudi Arabia and other Gulf countries have boosted output in March, helping to make up for supply lost due to violence in Libya, a Reuters survey found on Wednesday.

Any extra supply from within the Organization of the Petroleum Exporting Countries to offset Libyan losses is likely to be welcomed by consumer nations concerned about the impact of oil prices over $114 a barrel on inflation and economic growth.

Supply from all 12 members of OPEC has averaged 29.13 million barrels per day (bpd) this month, down from 29.43 million bpd in February, the Reuters survey of oil companies, OPEC officials and analysts found.

OPEC members including Saudi Arabia, the United Arab Emirates and Kuwait have boosted production. Supply fell in Libya and Nigeria. Analysts expected Saudi output to rise even higher than March’s rate of 9 million bpd later in the year.

“I can see Saudi Arabia going higher in later months especially if they succeed in marketing their new lighter, sweeter grades,” said Paul Tossetti, senior energy adviser at PFC Energy.

Already, Riyadh has sold European buyers around 2 million barrels of a new crude blended to compensate for lost Libyan barrels, a source at the Saudi state oil company said on Tuesday.

The Libyan crisis has, for now, halted a steady rise in supply from OPEC in response to recovering world demand and higher oil prices, according to Reuters surveys.

OPEC output has fallen for two months since reaching 29.63 million bpd in January, the highest since December 2008.

Oil traded lower on Wednesday. Brent crude was down 29 cents at $114.87 a barrel as of 1251 GMT.


Libya’s production posted the largest drop in OPEC of 1.03 million bpd in March, the survey found, to average 320,000 bpd.

Until violence broke out earlier this year, output had been running at a normal rate near 1.6 million bpd.

Supply also fell in March in Nigeria — like Libya a producer of high-quality oil — because of field maintenance, the survey showed.

Export schedules suggest Nigeria’s output will rise in April by as much as 200,000 bpd, as work is completed.

Among the countries boosting output in March, Iraq increased exports from the Basra terminal in the south and Angolan supply climbed following field maintenance, the survey found.

OPEC has decided against taking any formal action on raising its production in response to the Libyan crisis and it is not scheduled to meet until June.

The group has not officially changed its policy for more than two years since cutting output by a record 4.2 million bpd in December 2008 as prices fell and recession destroyed demand.

In the months following the agreement, OPEC delivered as much as 80 percent of the promised supply reduction but production has been rising since mid-2009 in response to a recovery in world demand and higher prices.

OPEC does not provide timely official production figures, so the oil industry relies on supply estimates from news agencies, consulting firms and organizations such as the International Energy Agency.

(Additional reporting by Barbara Lewis in London and Amena Bakr in Dubai; Editing by William Hardy)

OPEC oil output falls further on Libya