OPEC Made Only Half of Planned Supply Hike Amid African Losses
(Bloomberg) -- OPEC delivered barely half the oil-production increase it had planned for October as African members continued to struggle with output losses.
The Organization of Petroleum Exporting Countries is reviving supplies halted during the pandemic, but added only 140,000 barrels a day last month because of the difficulties faced by Angola and Nigeria, according to a Bloomberg survey.
The under-performance may increase the impatience expressed by U.S. President Joe Biden and other world leaders, who have been pressing OPEC and its allies to alleviate surging fuel prices by opening the taps. Core members of the cartel including Saudi Arabia, Kuwait and Iraq have so far rebuffed those calls as the group prepares to meet on Thursday.
The combination of a recovery in fuel consumption after the pandemic and constrained supply has led to a global energy crunch. It has been felt most acutely in natural gas markets, but Brent crude has have rallied 30% since late August. The price surge is squeezing consumers and adding to fears over inflation.
While Middle Easter members of the cartel like Saudi Arabia, Iraq and the United Arab Emirates are all increasing supplies in line with their schedule, their counterparts in Africa are lagging behind.
Angola’s production slumped by 70,000 barrels a day to 1.1 million a day, sinking back to the 14-year low reached earlier this year, according to the survey. The country has been plagued by investment constraints resulting in declining supply from deep-water oil fields.
Nigeria’s output fell by 60,000 barrels a day to 1.44 million a day last month, just above the five-year low hit in August. Last week Royal Dutch Shell Plc was forced to invoke a clause suspending exports from its Bonny Oil Terminal in the country after a pipeline halt.
Total production by the group’s 13 members was 27.58 million barrels a day, according to the survey. Overall, the cartel is curbing output by 15% more than stipulated by its production quotas.
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