OPEC's crude oil production fell last month, according to a new survey. The drop in production comes as Libya's oil industry continues to struggle under the pressure of civil unrest.
A new Bloomberg survey revealed on Tuesday that OPEC's crude oil production fell by 70,000 barrels per day in August, to 27.06 million barrels daily. The loss was due to Libya's production hiccup, which saw a dip of 150,000 bpd. Meanwhile, the survey showed that Kuwait and Nigeria both increased production.
Libya's production losses are currently much more significant than 150,000 bpd. But the steep losses are recent and didn't affect most of the month. Current production losses have been estimated at anywhere from 500,000 bpd to 700,000 bpd, with a new force majeure placed on the El Feel field.
The largest member of the OPEC group, Saudi Arabia, complied with its quota for August as expected. Iraq, on the other hand, has again failed to cut production in line with its quota and still produced 320,000 bpd more than it had agreed to in August, according to the survey. Iraq has insisted it will engage in compensatory cuts to make up for its overproduction.
Despite the significant production losses from Libya which are not yet completely reflected in the August OPEC figures, oil prices remain on a downward spiral, sinking more than 4% on Tuesday in a market that has some traders stumped. Brent crude dipped to $74.06 per barrel on Tuesday afternoon, a loss of 4.46% (-$3.46) on the day. The overriding market fear is depressed demand data out of China, along with OPEC's possible unwinding of its production quota beginning in October-although the group has been adamant that it will only do so if market conditions dictate that it makes sense to do so.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More