OPEC output down as Libyan loss tops Saudi gain

April 2, 2011 - 0:0
The Organization of Petroleum Exporting Countries’ crude output dropped in March as increases from Saudi Arabia failed to make up for a decline in Libyan production to a 49-year low, a Bloomberg News survey showed. Production slipped 363,000 barrels, or 1.2 percent, to an average 29.022 million barrels a day, the lowest level since September, according to the survey of oil companies, producers and analysts. Daily output by members with quotas, all except Iraq, decreased 353,000 barrels to 26.437 million, 1.592 million above their target. Crude oil for May delivery rose $2.45, or 2.4 percent, to $106.72 a barrel on the New York Mercantile Exchange, the highest settlement since Sept. 26, 2008. Brent oil for May settlement climbed $2.23, or 1.9 percent, to $117.36 a barrel on the London-based ICE Futures Europe exchange. The European benchmark reached $119.79 on Feb. 24, the highest intraday price since Aug. 22, 2008. “The numbers show that it will take a while before the Saudis and others make up for Libya’s missing barrels,” said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “We should see the total rise in April. This explains why Brent is above $115.” Saudi Arabia, OPEC’s biggest producer, increased output by 300,000 barrels, or 3.4 percent, to 9 million barrels a day in March, the highest level since October 2008. The kingdom exceeded its quota by 949,000 barrels. Saudi Arabian Oil Co. Chief Executive Officer Khalid Al- Falih said last month that the kingdom is “ready to supply incremental change in demand,” to cover any shortfall from Libya. Oil Minister Ali al-Naimi announced March 8 that Saudi Arabia had developed two light, low-sulfur blends that are closer to the specifications of oil normally supplied by Libya. The desert kingdom has about 3.5 million barrels of spare daily production capacity, al-Naimi said this month. The country could increase output by 2.5 million barrels within 30 days, according to data compiled by Bloomberg News. The United Arab Emirates bolstered output by 160,000 barrels to 2.51 million barrels a day, the second-biggest increase this month. The country was OPEC’s fourth-largest producer in March. (Source: Bloomberg)