OPEC Output Rose a Fourth Month in July, Survey Shows

Aug. 3 (Bloomberg) -- The Organization of Petroleum Exporting Countries increased oil output for a fourth straight month in July, reducing compliance with quotas as some members took advantage of rising prices, a Bloomberg News survey showed.

Oil output averaged 28.39 million barrels a day last month, up 45,000 from June, according to the survey of oil companies, producers and analysts. The 11 OPEC members with quotas, all except Iraq, pumped 26.035 million barrels a day, 1.19 million more than their target.

“They are still doing a good job,” said Sarah Emerson, managing director of Energy Security Analysis Inc. in Wakefield, Massachusetts. “There is a bit more leakage but that’s not a problem given where prices are at.”

Crude futures have more than doubled since falling to a four-year low of $32.40 a barrel at the end of last year, which forced OPEC to cut output. Oil traded above $70 today for the first time in a month on signs industrial output is picking up, potentially triggering a recovery in fuel demand.

OPEC agreed at three meetings last year that the members with quotas would cut output by a combined 4.2 million barrels a day to 24.845 million in a bid to bolster prices. The group is due to meet and discuss production levels in Vienna on Sept. 9.

Increasing Output

The United Arab Emirates raised output by 40,000 barrels a day to 2.27 million barrels a day, the biggest increase of any member last month. The gain left production 47,000 barrels a day above the country’s quota.

Algerian production climbed 35,000 barrels to an average 1.285 million barrels a day in July, the second-biggest increase of any member. The country pumped 82,000 barrels a day above its quota last month.

Saudi Arabia, Kuwait and Qatar were the only OPEC members to keep within their targets in July. Saudi Arabia, the world’s biggest oil exporter, pumped 8.02 million barrels of crude a day, unchanged from the previous month, the survey showed.

The country may cut the official price of its Light oil for September sales to Asia, spurring purchases of the fuel, refinery officials said today.

Kuwaiti output rose 25,000 barrels a day to 2.2 million, according to the survey. Output was 22,000 barrels a day lower than the country’s quota.

Qatar, the second-smallest producer in the group, pumped 705,000 barrels a day in July, up 10,000 barrels from June and 26,000 barrels below its target.

Biggest Cheaters

Iranian output fell 10,000 barrels a day to 3.79 million in July, the report showed. June production was revised 50,000 barrels higher. The country, OPEC’s second-biggest producer, pumped an average 454,000 barrels a day above its target, according to the survey.

Iran, the member that’s least compliant with output limits, according to the survey, expects oil prices to reach $80 a barrel by the end of the year on “optimistic” signs in the market, the country’s OPEC Governor, Mohammad Ali Khatibi, said.

Angola increased production by 20,000 barrels to 1.81 million barrels a day. The gain left output 293,000 barrels above the nation’s target, the second-biggest excess in the group. Output in the African country surpassed Nigeria’s for the first time since June 2008.

Venezuela raised output by 10,000 barrels to 2.21 million barrels a day. The South American country pumped 224,000 barrels a day above its target of 1.986 million last month, the survey showed.

Nigerian Unrest

Nigeria’s production slipped 100,000 barrels to an average 1.75 million a day in July because of attacks by militants on oil facilities in the country’s Niger River delta. It was the biggest decline by any OPEC member and left Nigerian output at the lowest level since August 1994.

The Movement for the Emancipation of the Niger Delta, the country’s main militant group, declared a 60-day cease-fire in its campaign targeting oil and gas installations on July 15 after authorities freed leader Henry Okah. Violence in the region intensified in May when the government started an offensive against MEND bases.

Iraqi oil output fell 15,000 barrels to 2.355 million barrels a day in July, according to the survey. The country exported an average 2.037 million barrels of oil a day, the highest since the U.S.-led invasion in 2003, Assim Jihad, an Oil Ministry spokesman, said in a telephone interview today. Iraq pumped about 2.5 million barrels a day last month, Jihad said.