Main Update Highlights from entire month of June, 2013
Crude oil production from OPEC rose by 70,000 b/d to 30.57mn b/d in May 2013, according to a recent
(10 June) Platts survey of OPEC and oil industry officials and analysts. Increases totalling 180,000 b/d from
Angola, Kuwait, Libya, Saudi Arabia and the United Arab Emirates were partly offset by 110,000 b/d in
reductions from Algeria, Iran, Iraq and Nigeria. ‘All the figures point to a market being significantly
oversupplied, and in May, production actually rose slightly. Yet the price of Brent crude oil stays solidly
above $100/b, and the organisation at its late‐May meeting did lower output, ’said John Kingston, Platts
Global Director of News. ‘A lot of market participants have been predicting a significant slump in prices for
a while as a result of the supply/demand imbalance, yet the markets aren’t going along with that forecast.
Saudi Arabia’s use of crude for direct burning in power stations rises during the summer months, and the
latest survey showed the kingdom increasing output for the second consecutive month after a steady
downtrend that took it from 10mn b/d last August to 9.2mn b/d early this year. The survey results showed
that Saudi production rose by 100,000 b/d to 9.4mn b/d in May 2013, up from 9.3mn b/d in April.
Iran’s output slipped to 2.68mn b/d under continuing pressure from US and European Union sanctions
directly targeting Tehran’s oil revenues. The US Congress is currently considering a new bill that obliges
China, India and other countries still buying Iranian crude to cut their purchases by a total of 1mn b/d
over the next year to avoid penalty. An amendment attached to the bill would also require a reduction in
the total value of those imports to deny Tehran the possibility of benefiting from higher oil prices.
Iraq, now OPEC’s second biggest producer after Saudi Arabia, saw output edge down to 3.1mn b/d in
May, from 3.15mn b/d in April as exports dropped. Nigerian output slid further, to 1.94mn b/d, from
1.97mn b/d in April. Nigeria is the OPEC producer most affected by the shale oil boom that has slashed its
sales into the US, but its oil sector is also subject to frequent sabotage by militants in the Niger Delta. The
estimates leave OPEC overproducing its 30mn b/d crude output ceiling by some 570,000 b/d. They also
show the oil producer group continuing to pump well above its own 29.84mn b/d projection of demand
for OPEC crude this year and above that of the International Energy Agency (IEA) which in May said it
expected the call on OPEC crude to average 29.6mn b/d. In fact, the IEA expects demand for OPEC crude
to remain below 30mn b/d for the next five years, thanks in part to the boom in US shale oil production,
notes Platts. OPEC, which was seemingly unfazed by the shale phenomenon, now plans to study it.
Ministers, however, decided at their 31 May meeting in Vienna to extend their current output ceiling,
which has been in place since the beginning of 2012, through the second half of this year and to review it
in early December.
Resource: Oil and Gas Magazines, Newspapers & websites