OPEC lifts Jan output, long way under Feb target
LONDON: OPEC oil output edged higher in January as Saudi Arabia opened the taps to compensate for some of the shortage from strike-bound Venezuela, a Reuters survey found on Wednesday. January production rose 380,000 barrels a day from December to 25.65 million bpd but remained 1.67 million below volumes in November, before the Venezuelan strike, according to the survey of industry officials and monitors. Extra supplies from Saudi Arabia, the UAE, Nigeria and Iraq outweighed a further decline from Venezuela where rebel oilworkers kept a strangehold on exports in their bid to force President Hugo Chavez from office. While Caracas by the end of the month had restored output above a million barrels daily, average production was only 650,000 bpd, versus a million bpd in December and pre-strike November output of more than three million. Expectations are for a further gradual increase in February. Geneva-based consultancy Petrologistics is projecting 1.3 million bpd for the month. Saudi Arabia added 500,000 bpd to reach 8.55 million in January. Riyadh appeared ready to ratchet production higher but shipping and industry monitors said it had encountered difficulty in marketing any more. Saudi Oil Minister Ali al-Naimi has promised to keep world markets adequately supplied if a US-led war on Iraq comes while Venezuelan output remains hamstrung. Petrologistics is projecting 8.67 from Saudi in February but with spare capacity stretched in most other OPEC members, the group looks likely to fall short of its new February target. Naimi said at the weekend that Riyadh aimed to keep flows from the 10 OPEC members with quotas, excluding Iraq, to the 24.5 million bpd limit that ministers introduced in mid-January. That target is not officially implemented until February 1 but with Venezuela still way below par, the OPEC 10 in January remained a long way short of the target. They pumped 23.16 million bpd, up 290,000 bpd from December. Apart from Saudi, only the UAE and Nigeria were able to call on spare capacity to add any significant volume, rising by 50,000 bpd and 60,000 bpd respectively. Ironically, second only to Saudi in lifting output was Iraq, helping contain prices at about $33 a barrel for US crude in the countdown towards what most in the oil industry see as an inevitable war. Baghdad’s exports under the UN oil-for-food programme ran at 1.74 million bpd in January, up 90,000 bpd on the month. It pumps another 750,000 bpd for domestic use and border trade. With possible war only weeks away, the United States easily remains Iraq’s biggest customer. Traders estimated Iraqi sales to the US approached a million barrels daily, double last year’s average as refiners sought to fill the gap from Venezuela. The Reuters survey seeks a best estimate of flows from OPEC countries based on the views of officials, industry monitors and analysts inside and outside member countries. —Reuters