Wednesday 24th May, 2017
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Niger Delta Militancy: OPEC supply falls by 200,000 to 34.18mbpd

Niger Delta Militancy: OPEC supply falls by 200,000 to 34.18mbpd

Oil supply by OPEC mem­bers in December fell by 200,000 barrels per day to 34.18 million per day, led by attacks on oil pipelines and facili­ties by militants in the Niger Delta.
 
A survey by Reuters on Thurs­day showed that the fall in produc­tion by OPEC was led by Nigeria followed Saudi Arabia.
 
The decline, the first since May occurred despite higher exports from second-largest OPEC pro­ducer Iraq and a further upward trend in Libyan output.
 
OPEC had on November 30 agreed a deal with other major oil producers including Russia to cut oil supply by 1.8 million bar­rels per day beginning from Janu­ary 1, 2016, in a bid to boost pric­es of crude oil.
 
But Reuters reported that the survey which was based on ship­ping data and information from industry sources showed that sup­ply from OPEC in December fell to 34.18 million barrels per day (bpd) from a revised 34.38 mil­lion bpd in November, according to the survey based
 
Oil hit an 18-month high of $58.37 a barrel on Tuesday, boost­ed by the OPEC agreement.
 
The supportive impact of the agreement on prices may not oc­cur straight away, an analyst at SEB said.
 
“We are not necessarily set for an immediate price take-off. One problem is the very high OPEC production in fourth-quarter 2016,” said Bjarne Schieldrop, chief commodities analyst at SEB. “The still-rising crude oil produc­tion in Libya is also creating con­cerns that OPEC’s cuts might be less effective.”
 
Based on the December survey, OPEC is pumping 1.68 million bpd above the 32.50 million bpd production target that it agreed on November 30 to adopt from Jan. 1 in its first supply cut decision in eight years.
 
OPEC output started to climb following its decision in late 2014 to retain market share rather than cut supply to prop up prices. Saudi Arabia, Iraq and Iran all pumped more and production also in­creased due to the return of Indo­nesia in 2015 and Gabon in July 2016 as OPEC members.
 
In December, the biggest reduc­tion came from Nigeria, although not as a result of deliberate cuts to boost prices.
No Forcados crude was export­ed following an attack on a pipe­line, and shipments of the Ag­bami stream fell most likely due to planned maintenance work, sourc­es in the survey said.
 
Nigeria and Libya are both ex­empted from the OPEC supply cut agreement because of output losses caused by conflict.
 
Nigerian militant group Niger Delta Avengers said in November it had attacked the Forcados pipeline.
 
Saudi Arabia, which said it pumped a record amount in No­vember, supplied less in Decem­ber, sources in the survey estimat­ed. Exports were lower because customers asked for less crude, not because of cutbacks implemented under the OPEC deal.
 
“Exports are down markedly from a massive November num­ber,” said one source who tracks Saudi output. “The bottom line is December is down from Novem­ber with regard to supply to mar­ket.”
 
Among countries with high­er output, the largest increase of 70,000 bpd was in Libya, where a two-year blockade was lifted in December on pipelines leading from two western fields. The re­covery remains at risk from polit­ical conflict.

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