A pick-up in OPEC output over the past two months has been confirmed by the latest figures from the International Energy Agency (IEA) in Paris. The agency’s figures show that OPEC production was running 700,000 barrels a day (b/d) above quota in October, reflecting the steady recovery in output since the end of the Nigerian oil strike in August. The extra production has been absorbed by rising demand which is not as strong as earlier forecasts suggested.
The IEA data shows that OPEC supplied about 25.2 million b/d in October. This is a 200,000 b/d increase since September and 600,000 b/d more than the figure for August. OPEC’s agreed quota is 24.52 million b/d.
The IEA says the biggest rise in output has come from Nigeria which is producing an estimated 2 million b/d, its highest figure since March.
The IEA also points to weaker demand than expected during the fourth quarter. The main cause of the small, downward adjustment of its forecasts is slower growth in demand for oil in China. The agency is still projecting a 2 per cent increase in world oil demand in 1995, equivalent to an additional 1.1 million b/d. The latest demand outlook figures from the IEA may reinforce the case for OPEC to roll over its existing quota at the Bali summit which opens on 21 November (MEED 11:11:94).
A reminder of the huge potential for further non-OPEC oil supplies has come from the UK which approved two new oil field developments in the Atlantic Ocean, west of the Shetland islands on 7 November. Industry estimates suggest there are 11 potential fields in the region which could contain 3,500 million barrels.
Another challenge to Middle East oil has come in the form of a proposed Mediterranean gas ring. The plan is being advocated by Agip of Italy and would entail a trunk line which would link up existing national systems with the Maghreb-Europe pipeline and provide an integrated outlet for North African gas.
The Agip scheme also envisages the expansion of the proposed Egypt/Israel gas line through to Turkey. Proponents of the plan say it would act as a catalyst for economic development throughout the Mediterranean region.