OPEC volumes fall in April as bad weather hits Iraqi supply

Platts' latest estimates of OPEC production show that the oil producer club pumped an average 29.21 million b/d in April. That's 90,000 b/d lower than estimated March output of 29.3 million b/d

Excluding Iraq, the so-called OPEC-11 -- the 11 members bound by production quotas -- increased output by 40,000 b/d to 26.89 million b/d.

Iraqi supply, estimated at 2.32 million b/d, was down by 130,000 b/d because of bad weather.

Angola was the only other member to see a decrease. Its production dipped by 30,000 b/d to 1.88 million b/d.

Increases totaling 70,000 b/d came from Kuwait, Libya, Nigeria, Saudi Arabia and the UAE, but this was more than offset by the 160,000 b/d of decreases from Iraq and Angola.

A month ago, when we estimated that the OPEC-11 were overproducing their 24.845 million b/d ceiling by 2 million b/d, we wondered how much wider the gap could get. In theory, given the 6 million b/d of spare capacity the group currently claims, it could get a lot wider, but that would presumably depend on oil prices moving a lot higher and there are few signs at the moment of that happening.

OPEC itself earlier this week said it expected world oil demand to rise by 1.1% to reach an average level of 85.38 million b/d this year but warned that if US gasoline demand turned out to be lower than expected, then total world oil demand will be lower than the current estimate. US demand from the US could also be hit if the manufacturing and petrochemicals industries miss growth forecasts, reducing industrial fuel use, it said.

Despite its cautious optimism that global oil demand will grow to the tune of 940,000 b/d this year, OPEC sees demand for its own crude -- including Iraqi production -- actually falling slightly year-on-year, by 100,000 b/d to 28.85 million b/d.

That figure is well below current OPEC-12 production, however, regardless of whose estimates one takes into account -- OPEC, using secondary sources, estimates its April output at 29.251 million b/d, the International Energy Agency's figure is 29.03 million b/d and the US Energy Information Administration's is 29.29 million b/d.

The EIA, which is the statistics arm of the US Department of Energy, is forecasting that OPEC will produce an average 29.44 million b/d this year and 30.01 million b/d in 2011.

It reckons that, barring big changes in the outlook for world oil markets, OPEC's key Gulf producers -- Saudi Arabia, Kuwait and the UAE-- are likely to keep crude production steady for the foreseeable future and that any increases will come from Angola and Nigeria.