OPEC oil production missed target again in June as outages weigh – Survey | Investment News

LONDON (Reuters) – OPEC failed to deliver on a June oil production boost promised under a deal with allies, a Reuters survey showed on Friday, as unintended cuts in Libya and in Nigeria offset supply increases from Saudi Arabia and other major producers.

The Organization of the Petroleum Exporting Countries (OPEC) pumped 28.52 million barrels per day (bpd) in June, according to the survey, down 100,000 bpd from May’s revised total. OPEC had planned to increase June production by about 275,000 bpd.

OPEC plus Russia and other allies, known as OPEC+, are reversing pandemic-driven 2020 production cuts, though many are struggling to do so. OPEC+ at a meeting on Thursday stuck to its planned August production hike.

The deal called for a 432,000 bpd increase in June from all OPEC+ members, of which about 275,000 bpd is shared by the 10 OPEC producers covered by the deal. Supply of the 10 increased by only 20,000 bpd, according to the survey.

Production exceeded promised increases between October and April, with the exception of February, according to Reuters surveys, as many producers lack the capacity to pump more due to insufficient investment, a trend accelerated by the pandemic.

As a result, the 10 OPEC members are pumping far less than expected under the deal. OPEC’s compliance with promised cuts was 253% in June, according to the survey, up from 178% in May.

The biggest decline was in Libya, where supply fell by 170,000 bpd as unrest continued to dampen production in the country. Libya is one of the members exempted from making voluntary cuts.

The second biggest decline of 80,000 bpd came from Nigeria, where outages and maintenance hampered production. Refinitiv’s figures dropped June exports by at least 100,000 bpd, as did two other sources in the survey that track flows.

Iraqi supply also fell, with survey sources citing a drop in exports.

Saudi Arabia, the United Arab Emirates and Kuwait added a combined 130,000 bpd. Saudi production was more than 100,000 bpd below its quota, according to the survey.

Production in Iran and Venezuela, the two other exempt producers, also increased slightly.

The Reuters survey aims to track market supply. It is based on shipment data provided by external sources, flow data from Refinitiv Eikon, information from tanker trackers such as Petro-Logistics, as well as information provided by sources within oil companies , OPEC and consultants.

(Additional reporting by Ahmad Ghaddar; editing by David Evans)

Copyright 2022 Thomson Reuters.

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