OPEC oil production hits record high on Iraq, Libya output: IEA

An increase in oil supply from Iraq and Libya has pushed up OPEC’s oil production by 160,000 barrels per day (bpd) to an all-time high of 33.64 million bpd in September, the International Energy Agency (IEA) said in its monthly oil market report.

“Supply from the group stood 0.9 million bpd above 2015 due to robust Middle East output,” said the Paris-based agency, which advises industrialized nations on their energy policies.

Global oil supply rose by 600,000 bpd to 97.2 million bpd in September, with non-OPEC supply up nearly 500,000 bpd on higher flows from Russia and Kazakhstan.

According to IEA estimates, non-OPEC supply will drop by 900,000 bpd in 2016, before rebounding by 400,000 bpd in 2017.

Demand is forecast to expand by 1.2 million bpd this year, with a similar gain expected in 2017.

“Growth continues to slow, dropping from a five-year high in Q3-2015 to a four-year low in Q3-2016 due to vanishing OECD growth and a marked deceleration in China,” IEA said, adding that colder weather could lead to a growth rebound in the last quarter of this year.

Benchmark Brent crude prices rose in September as market rebalancing continued, and participants anticipated an OPEC supply cut, the agency added.

OPEC has agreed to cap supply between 32.5 million bpd and 33 million bpd, with details to be set by November-end.

“Now the real work starts,” the agency said. “Critical details – like individual country allocations, production baseline and implementation date– need to be finalized when OPEC meets on November 30.”

Iran, Libya and Nigeria— all aiming to raise output— are said to be exempt from cuts.

“A significant rebound in supply from Libya and Nigeria and further growth from Iran would suggest that bigger cuts would have to be made by others, such as Saudi Arabia, to meet the new output target,” IEA noted.