Opec output hit 3-year high in November

The Organisation of Petroleum Exporting Countries (Opec) pumped more oil in November, the highest level since 2012, primarily on the back of record production from Iraq.

The 12-nation cartel, which accounts for a third of global crude output, pumped 31.7 million barrels per day (bpd) in November, up by 230,100 bpd from October, an indication of the organisation's resolve to maintain high output levels in the coming months despite the deep plunge in prices for the essential commodity, which has tanked to their 7-year lows in recent days.

In its latest monthly oil market report, Opec said low prices will drive strong global demand in 2016, which is estimated to be around 94.13 million bpd, up 1.25 million bpd from this year's 92.88 million bpd, that was an increase of 1.53 million bpd over last year.

The November production is about 900,000 bpd more than Opec's estimated demand for crude next year.

Opec's demand this year is around 29.4 million bpd, lower than its current output. In 2016, demand forecasts for Opec crude remains unchanged at 30.8 million barrels a day, an increase of 1.5 million barrels over the current year.
Opec warned that its ''oil demand forecast for 2016 is subject to considerable uncertainties, depending on the pace of economic growth, development of oil prices, and weather conditions, as well as the impact of substitution and energy policy changes.''

Crude oil prices have slumped over 60 per cent from their June 2014 highs of over $110 a barrel for Brent crude to below $40 a barrel yesterday due to continuing supply glut and a slowdown in China, the world's second-largest economy.

Iraq, in its efforts to bolster the country's finances amid continuing war with Islamic State, produced 4.3 million bpd last month, up by 247,500 bpd.

Saudi Arabia, the world's largest crude exporter, produced 10.13 million bpd, about 25,200 bpd lower than in October.

Non-Opec oil supply is estimated to shrink by 380,000 bpd to 57.14 million bpd in 2016, a downward revision for 250,000 from the previous estimate. Figures for 2015 has been revised upward by 280,000 bpd to average 57.51 million bpd based on actual production data.

''This downward trend should accelerate in coming months, given various factors, mainly low oil prices and lower drilling activities,'' Opec said.

After a marathon session last week, Opec dumped its earlier production target of 30 million bpd and decided continue its policy of not constraining output. The decision drove the commodity prices further down to their 7-year lows.