TOTAL world oil supply rose by 0.635m b/d in October, to 83.32m b/d, according to the IEA. Opec production was at its highest since January, increasing by 110,000 b/d to 29m b/d, as quota-observance continues to slip amid higher oil prices, which pushed past $80/b earlier in November. The IEA says the 11 quota-bound members are pumping 1.6m b/d more than the target of 24.845m b/d. The compliance rate has fallen from 64% in September to around 61%.
The IEA notes that Opec members have been especially willing to ease quota restrictions through sales to Asian buyers. The Mideast Gulf members of the group are also concerned that rising oil prices could imperil the global economic recovery, triggering another fall in demand for their crude.
Despite the rises in global output, total supply remains 0.85m b/d lower than a year ago. Non-Opec output increased sharply, rising by 380,000 b/d, to 51.4m b/d, as scheduled maintenance in the North Sea ended and October passed without hurricanes in the Gulf of Mexico. Non-Opec supply next year is also expected to rise by 0.8m b/d compared with the average in 2009, to 51.9m b/d.
OECD stocks rose by 1.6m barrels in September, to 2.8bn barrels, 4.3% above the level a year earlier. Forward demand cover fell from 60.9 days to 60, but remains 3.8 days higher than a year ago. Global refining throughput in the fourth quarter is forecast to fall by 0.3m b/d, to 72.8m b/d, with high inventories of middle distillates and the strong oil price, undermining margins.
