OPEC pumps more oil to offset Iran sanctions impact

Crude oil futures traded lower in the European morning Monday as expectations of increased global crude oil supply outweighed those of the impact of US sanctions on the Iranian oil industry.

At 1132 GMT, December ICE Brent crude futures were down $1.22 from Friday's settle at $82.94/b, while the NYMEX November light sweet crude contract was down $1.01 at $73.33/b.

A survey of analysts, industry officials and shipping data released Friday by S&P Global Platts showed that OPEC and its 10 non-OPEC partners led by Russia boosted crude output by 180,000 b/d from August to 33.07 million b/d in September.

Saudi Arabia, OPEC's largest producer and the world's largest crude exporter, pumped 10.60 million b/d in September, according to the Platts survey, up 110,000 b/d from August.

Libya too has increased production, pumping 1.25 million b/d, according to an announcement maybe by the CEO of Libya's National Oil Corp. Mustafa Sanalla last week which Commerzbank analysts said could offset part of the shortfall in Iranian exports.

"The US appears to be abandoning its tough stance on buyers of Iranian oil. One of the favored countries appears to be India, which according to well-informed sources plans to buy 9 million barrels of crude oil from Iran in November," the analysts said in a note.

OPEC's Monthly Oil Market Report is due for release Thursday and the monthly International Energy Agency oil report is due on out on Friday.

"Even if Libyan output is on the rise global demand would still exceed global supply, not to mention the fact that Iranian output is expected to fall further. Another 500,000 b/d decline from November onwards would offset the bearish impact of the Russian/Saudi output increase," according to a commodity report published by PVM.

Source:
Platts