BAKERSFIELD: Oil pumping jacks and drilling pads at the Kern River Oil Field where the principle operator is the Chevron Corporation in Bakersfield, California. US energy firm Chevron reported yesterday a loss of $725 million in the first quarter, joining the growing list of petroleum giants that finished the period in the red. — AFP

LONDON: OPEC’s oil output rose in April to close to the highest level in recent history, a Reuters survey found yesterday, as production increases led by Iran and Iraq more than offset a strike in Kuwait and other outages. Top exporter Saudi Arabia, however, made no major change to output, the survey found, despite the kingdom hinting it could boost supply after OPEC and non-member nations failed to agree to freeze output at a meeting on April 17.

Oil has rebounded more than 75 percent from a 12-year low in January to reach $48 a barrel, helped by the freeze initiative and signs that lower prices are starting to curb higher-cost supply, despite high inventories and other persistent reminders of a glut. “The market is massively oversupplied,” said Eugen Weinberg, analyst at Commerzbank in Frankfurt. “This rally doesn’t have strong legs.” Supply from the Organization of the Petroleum Exporting Countries rose to 32.64 million barrels per day (bpd) this month, from 32.47 million bpd in March, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants.

That almost matches January’s 32.65 million bpd, when Indonesia’s return as an OPEC member boosted production and output from the other 12 members was the highest in Reuters survey records, starting in 1997. OPEC output has surged since it abandoned in 2014 its historic role of cutting supply to prop up prices, led by higher supply from Saudi Arabia and Iraq. Iran saw the sharpest increase in production in April after Western sanctions were lifted in January. Tehran, which wants to recover the market share it lost, has refused to limit its supply until it reaches pre-sanctions output. At 3.40 million bpd, Iranian output is within sight of the 3.50 million bpd it pumped at the end of 2011 before sanctions were tightened, according to Reuters surveys. However, some of the crude may have come from storage, giving a temporary boost to April supply, sources said. Iraq, which saw the fastest growth in production in OPEC in 2015, also raised output. Southern exports have risen to what may be a new record in April - depending on whether tankers loading at the end of the month are treated as April or May. Shipments of Kurdish crude from the north also rose.

OPEC’s third-largest supply increase in April came from the United Arab Emirates, following the end of maintenance work on oilfields that produce Murban crude. Of the countries that reduced output, the largest decline was in Kuwait due to a three-day workers’ strike which temporarily more than halved oil output and curbed refinery operations. Nigerian output fell due to the continued lack of Forcados crude exports and a brief disruption to shipments of another stream, Brass River. Repairs on a pipeline to the Forcados terminal will take until June, the government said. Loading problems, power failures and other problems dented Venezuela’s supply by an estimated 40,000 bpd. Oil services firm Schlumberger is cutting activity in the cash-strapped nation, posing a threat to future output. Saudi Arabia kept output steady compared with March, sources in the survey said, even though use in domestic power plants is rising.

Saudi production was estimated at 10.15 million bpd versus 10.18 million in March. “Exports are lower,” said a source who monitors Saudi output. “The month is not over yet so let’s wait for the final number, but that’s what I am seeing here and now.” OPEC meets on June 2 in Vienna and may discuss the freeze initiative again.

However, OPEC officials have been encouraged by the price recovery, which may take the urgency out of a renewed attempt to forge a deal. Meanwhile, analysts are growing increasingly confident that a near-two-year rout in oil has ended, and raised their price forecasts for a second month running, as healthier demand and a drop in US shale output balance the market by 2017.

The inability of OPEC and non-OPEC producers to agree to limit oil output at a meeting earlier this month is not expected to slow the rebalancing of global demand and supply. The survey of 29 analysts projected a slightly more bullish outlook, raising their average forecast for Brent crude futures in 2016 to $42.30 a barrel, compared to $40.90 in the March poll. Last month’s survey saw an upward revision in 2016 Brent forecasts for the first time in 10 months. Brent has averaged about $40 a barrel in 2016. Oil prices are headed for a fourth straight week of gains and a rise of around 20 percent in April, their largest monthly increase in a year.

Analysts said the failure of the Qatar meeting among the world’s largest producers to reach an agreement to keep output at January’s levels has had little or no impact on prices. “The status quo is already such that virtually all producers, except Iran, have little to no room to increase production from current levels,” said Raymond James analyst Luana Siegfried. Since the April 17 stalemate in Doha, the oil price has rallied 21 percent to its highest since November. Iran’s oil output will rise only modestly this year and next, but it will be enough to stop global supply and demand from rebalancing in 2016, according to a Reuters poll earlier this month. — Reuters