Libya conflict hits world oil output
Global oil production fell to 85.9 million barrels a day in March
Global oil production fell by 0.67m b/d to 85.9m b/d in March as Libyan output went into sharp decline following a popular uprising against the Muammar Qadhafi regime, the International Energy Association (IEA) said in its latest monthly oil-market report.
All oil production from Libya, where output was 1.6m b/d before conflict began, has since ceased. Libya’s outage hit Opec’s March output, knocking 0.89m b/d from the group’s supply. Opec production in March averaged 29.2m b/d and spare capacity slumped to 3.91m b/d, the IEA said.
Saudi Arabia accounts for the bulk (3.2m b/d) of that capacity. But the kingdom said late last month that it had cut output again, believing the market to be “oversupplied”, despite persistently high prices.
Non-Opec supply rose by 200,000 b/d to 53.3m b/d, despite unrest and strikes in Yemen, Oman, Gabon and the Ivory Coast, which shut in 100,000 b/d, the agency said. Rising supplies from Canada will lift non-Opec output this year to 53.7m b/d, the IEA forecast, compared with 52.8m b/d last year.
The stocks outlook is less clear. In February, OECD industry stocks dropped by 50.8m barrels to 2.7m barrels, or 59.2 days of forward cover, said the IEA – suggesting high prices were prompting a draw from inventories. Seasonal refinery turnarounds also led stocks lower and the agency said March data point to an 8.1m draw in the US and Europe. But it also said oil held in floating storage is on the rise, suggesting buyers are worried about longer-term supply disruption.