OPEC Oil Output Declined in August, Survey Indicates

Sept. 1 (Bloomberg) -- The Organization of Petroleum Exporting Countries reduced oil output for the first time in five months in August, led by a decline in Iraq, a Bloomberg News survey showed.

Production averaged 28.445 million barrels a day last month, down 40,000 from July, according to the survey of oil companies, producers and analysts. The 11 OPEC members with quotas, all except Iraq, pumped 26.055 million barrels a day, up 20,000 barrels from the previous month and 1.21 million more than their target.

Crude prices have more than doubled from a four-year low of $32.40 a barrel reached the end of last year, which caused OPEC to curb production. Oil has traded between $65 and $75 since July 31. Prices today fell $1.91, or 2.7 percent, to $68.05 a barrel on the New York Mercantile Exchange.

“Prices are still flirting with $70 nearly a year after they started making cuts, so you have to say they have done a pretty good job,” said Sarah Emerson, managing director of Energy Security Analysis Inc. in Wakefield, Massachusetts.

OPEC agreed at three meetings beginning in September 2008 that the 11 members with quotas would trim output by 4.2 million barrels a day to 24.845 million. The group is scheduled to meet and discuss production levels in Vienna on Sept. 9.

Output cuts have left OPEC with 6.055 million barrels a day of spare capacity, the survey showed. Saudi Arabia can increase output by 2.76 million barrels, the most of any member.

Excess Capacity

“The spare capacity appears to be in strong hands,” Emerson said. “I don’t know how successful OPEC would be in maintaining quota adherence and prices if the spare capacity were in Iran, Venezuela or Nigeria.”

Iraqi oil output fell 60,000 barrels to 2.39 million barrels a day in August, according to the survey. July production was revised 95,000 barrels higher.

Saudi Arabia, Kuwait and Qatar were the only OPEC members to keep within their targets in August. Saudi Arabia, OPEC’s biggest producer, pumped 8.04 million barrels of crude a day, up 20,000 barrels from the previous month. The increase left production 11,000 barrels a day below the kingdom’s quota of 8.051 million.

Kuwaiti output was unchanged at 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 723,000 barrels a day in August, up 18,000 barrels from July and 8,000 barrels below its target.

Exceeding Targets

Iranian output fell 30,000 barrels a day to 3.76 million in August, the biggest decline of any member, the report showed. The country, OPEC’s second-biggest producer, pumped an average 424,000 barrels a day above its target, the most of any member.

OPEC’s two West African members, Nigeria and Angola, had the biggest production increases last month.

Nigeria’s output rose 30,000 barrels a day to an average 1.78 million. Under President Umaru Yar’Adua’s amnesty program, which started Aug. 6, fighters in the oil-rich Niger Delta had 60 days to give in their weapons. Attacks by armed groups in the region have curbed exports since 2006. The country exceeded its target by an average 107,000 barrels a day.

Angola increased production by 25,000 barrels to 1.835 million barrels a day, the most since November. The gain left output 318,000 barrels above the nation’s target.

Angolan exports are scheduled to rise. Sixty-two cargoes totaling 59.1 million barrels, or an average of 1.903 million barrels a day, are scheduled to load in October, preliminary shipping programs show. That is the highest since December 2008 and compares with 58 cargoes, or 1.854 million barrels a day, planned for September.