Nigeria's recovery lifts OPEC's June output to highest

Nigeria’s gradual oil sector recovery following a peri­od of respite from militan­cy has boosted crude supply from the Organisation for Petroleum Ex­porting Countries (OPEC) from 32.57 million barrels per day in May to 32.82 million bpd in June.

The record, based on survey of shipping data and information from industry sources, accord­ing to Reuters, was equally aided by activities in Iran and other Gulf members, as higher supply from major Middle East producers, ex­cept Iraq, underlined their focus on market share.

Price recovery going up to $50 a barrel has reduced the urgen­cy to prop up the market as April negotiations among producers to freeze output failed. The June fig­ure would be less than the average demand that OPEC expects for its crude in the third quarter.

This suggests that demand could exceed supply in the com­ing months if OPEC does not pump more than current levels. Reuters cited an analyst at Com­merzbank in Frankfurt, Carsten Fritsch, as saying: “We could see a slight supply deficit - it depends on further development of unplanned outages.”

Supply has surged since OPEC abandoned its historic role of cut­ting supply to prop up prices in 2014. June’s biggest increase of 150,000 bpd came from Nigeria, where output had shrunk to its lowest in over 20 years due to at­tacks on oil facilities.

Iran also boosted supply after the West lifted sanctions in Jan­uary, while each of Saudi Arabia and the United Arab Emirates in­creased supply by 50,000 bpd, ac­cording to the survey. Saudi output edged up to 10.30 million bpd due to higher crude use in power plants to meet air-conditioning needs.

Similarly, Libya increased output by 40,000 bpd after it reopened the Marsa al Hariga export terminal in late May, and the supply is still a fraction of the pre-conflict rate.