OPEC production increased significantly in October, as Libya restarted oil infrastructures which were under blockaded for months, a survey by Bloomberg showed. Libya, which is exempt from the OPEC+ supply cut deal, reopened crude oil export taps thanks to easing internal political turmoil. At the same time, Iraq and Nigeria were once again disregarding the vows to rein in their exports. According to the survey, OPEC producers pumped 24.74 million bpd of crude last month, 470,000 bpd higher than in September.
Analysts said that the increasing production poses another threat to OPEC+ plan to relax production curbs starting from January. Resurging COVID-19 infections in some major economies such as the US and the EU has also weighed on oil prices in the past few months. Brent crude futures dipped to below $40/barrel to their lowest since May. OPEC+ will hold a meeting from November 30 to December 1 to discuss its production policy for next year.
Libya managed to increase output from just 150,000 bpd in September to 450,000 bpd in October. The return of Libyan supplies surprised the oil market, but the alliance is usually sympathetic toward the conflict-torn country. However, it is unlikely to be the case for Iraq and Nigeria, which have repeatedly violated pledges to cut production deeper to compensate for their overproduction in the past months. Iraq ramped up supply by 160,000 bpd to 3.87 million bpd, while Nigerian supply increased by 120,000 bpd to 1.61 million bpd. In contrast, the UAE cut production by 100,000 bpd, the most significant reduction among OPEC members, suggesting that it was still compensating its overproduction in August.
