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OPEC Output Up for 4th Month in Aug: Survey

Reuters
Monday, 1 Sep 2008 | 10:05 AM ET

OPEC oil supply rose for a fourth consecutive month in August, mainly due to higher output from Iran and smaller increases in Nigeria and Angola, a Reuters survey showed on Monday.

The survey indicates the Organization of the Petroleum Exporting Countries is pumping almost 800,000 barrels per day more than its target and comes as some members are voicing concern that the world market is oversupplied.

Extra OPEC oil and declining demand from slowing economies in the West have helped lower prices to $113 a barrel from a record $147.27 in July.

OPEC meets on Sept. 9, and some analysts expect its next move will be to trim production.

"While the bias has been towards rising output for the last year, that period is drawing to a close and it's a question of how much actual output is going to be trimmed in coming months," said Paul Horsnell of Barclays Capital.

Supply from all 13 OPEC countries climbed to 32.82 million bpd in August from 32.59 million bpd in July, according to the survey of oil firms, OPEC officials and analysts.

Iran accounted for much of the increase.

OPEC's second-largest producer supplied less oil than expected in July due to limited demand for its heavier crude oil grades, which meant more crude was held in storage.

Output in August rebounded to 4.05 million bpd from 3.7 million bpd in July due to higher sales, the survey found.

Nigeria and Angola are also pumping more.

In Nigeria, where attacks by militants on oil installations have curbed output, production recovered by 60,000 bpd in August.

Angola also raised output slightly, despite the shutdown on Aug. 16 of BP's 200,000 bpd Plutonio oilfield following an incident at a gas plant at the facility.

OPEC pumps about two in every five barrels of oil.

Saudi Supply

The survey also found that supply from Saudi Arabia, the world's top oil exporter, has leveled off.

It pumped 9.65 million bpd in August, slightly less than 9.7 million bpd in July, according to the survey.

Supply estimates fell into a relatively wide range in August from 9.45 million bpd to 9.8 million bpd.

The kingdom raised output earlier in the year to meet demand and to quell what it saw as unacceptably high prices.

Kuwaiti supply was revised higher for July after the country's state oil company said last week the country had joined Saudi Arabia in pumping more oil in a bid to ease prices.

The survey suggests that the 12 members bound by output targets, all except Iraq, pumped 30.46 million bpd in August, 790,000 bpd more than their target of 29.67 million bpd.

OPEC has kept the supply target unchanged this year and meets to review output policy on Sept. 9 in Vienna.

Some OPEC members have suggested output should be cut back.

"In view of the drop in oil prices, there is this possibility that OPEC would approve an output cut in its upcoming meeting in Vienna," Iran's OPEC governor Mohammad Ali Khatibi was quoted on Monday as saying.

Among other OPEC members, Iraqi supply declined slightly due to lower shipments from the country's north and output in Libya was reduced marginally after a crude storage tank caught fire.

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