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Libyan Oil Output Resumption Significantly Increases OPEC Output
OPEC oil production rebounded from its lowest this year thanks to Libya resolving, even if temporarily, a political crisis over control of the Central Bank, Reuters has reported.
Libyan output has fully recovered after the country’s eastern-based government and Tripoli-based National Oil Corp (NOC) announced last week the reopening of all oilfields and export terminals. Libya was pumping ~1.2 million barrels of crude per day before production at the Sharara, El Feel and Essider oilfields was halted in late August.
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According to oil analytics firm Kpler cited by Reuters, in September, Libya crude exports averaged 460,000 bpd. According to a Reuters survey, OPEC output clocked in at 26.33 million barrels per day in October, good for a 195,000 bpd increase from September’s clip.
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OPEC pumped ~46,000 bpd more than the implied target for the nine members covered by supply cut agreements, with Gabon exceeding its target by the largest amount.
Meanwhile, the Reuters survey has found that Venezuela also increased crude output, with production hitting 860,000 bpd in October, the highest level in four years. Both Libya and Venezuela are exempt from OPEC+ production cut agreements.
However, Iraq and Iran posted sizable declines in exports, helping to offset some of the increase from Libya and Venezuela. According to Reuters, Iraq cut output to 3.98 million bpd due to a drop in production in northern Iraq as well as lower domestic consumption.
Further supporting oil prices was the decision by OPEC+ to delay production hikes. The Secretary General of OPEC, Haitham Al Ghais, has defended the OPEC+ decision to delay its output hike, saying “This is nothing unusual that has not been, let’s say, part of the modus operandi of OPEC+ since our agreement has been in place.” Al Ghais has also dismissed the ongoing oil demand concerns, saying there is “too much doom and gloom and pessimism in terms of the demand outlook by some corners in the market“.
By Alex Kimani for Oilprice.com
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