OPEC points to even bigger 2017 oil surplus as its output jumps

Fri Nov 11, 2016 9:27am EST
 
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By Alex Lawler

LONDON (Reuters) - OPEC reported an increase in its oil production in October to a record high led by members hoping to be exempt from the producer group's attempt to curb supply, weighing on prices and pointing to a larger global surplus next year.

The Organization of the Petroleum Exporting Countries pumped 33.64 million barrels per day (bpd) last month, according to figures OPEC collects from secondary sources, up 240,000 bpd from September, OPEC said in a monthly report.

The OPEC figures point to a bigger surplus than those of the International Energy Agency and underline OPEC's challenge in restraining supplies. Oil LCOc1 fell below $45 a barrel after the report was released, having reached a 2016 high near $54 after OPEC's deal was announced in September.

OPEC made little mention of the surprise election of Donald Trump as the next U.S. president, beyond noting that currency markets had seen "significant" volatility. It left unchanged its 2017 forecasts for U.S. and world economic growth.

"More data over the coming months will provide further insight to allow a more detailed review of the U.S. economic situation, particularly after the most recent elections," OPEC said in the report.

To speed up a rebalancing of the market, OPEC agreed at a meeting in Algeria on Sept. 28 to cut supply to between 32.50 million bpd and 33.0 million bpd. The group hopes to finalize further details at a meeting on Nov. 30.

The latest figures could complicate OPEC talks on how to share out the cuts. OPEC experts meet to discuss this on Nov. 25 and on Nov. 28 will meet officials from non-OPEC countries, OPEC Secretary General Mohammed Barkindo said on Monday.

According to OPEC's report, October's supply boost mostly came from Libya, Nigeria and Iraq - members that have sought to be exempt from cuts due to conflict. Iran, seeking an exemption as output was held back by Western sanctions, also pumped more.   Continued...

 
The OPEC flag and the OPEC logo are seen before a news conference in Vienna, Austria, October 24, 2016. REUTERS/Leonhard Foeger