The Organization of the Petroleum Exporting Countries pumped more oil in November than any month in three years, in another sign that the group has no plans to slow down its furious output levels.
The organization, with 12 nations that pump about a third of the world’s crude, said in its monthly market report that its total production rose in November by 230,100 barrels a day from October, to 31.695 million barrels a day, driven mainly by record output from Iraq. November’s total output is almost 900,000 barrels a day more than the demand for OPEC crude next year.
OPEC last pumped more crude in April 2012, when its production was 31.7 million barrels a day, an OPEC official said.
Iraq’s output—based on secondary sources such as shippers, analysts and industry executives—rose by 247,500 barrels a day last month to 4.307 million barrels, the report said. Iraq has been pumping furiously to shore up a budget strained by a war with Islamic State.
Oil prices fell further Thursday, with Brent crude dropping below $40 a barrel and the U.S. benchmark trading below $37 a barrel—both down more than 60% from highs in 2014.
Iraq’s output in 2015 has jumped by almost 500,000 barrels making it—along with the U.S.—one of the world’s two fastest sources of supply growth and a key driver of surging OPEC production, according to the International Energy Agency. Its output, however, fell in October by 195,400 barrels a day as storms delayed the country’s main terminal in the south.
Saudi Arabia, OPEC’s kingpin and the world’s largest oil exporter, reduced output by 25,200 barrels a day to 10.130 million barrels, the report by OPEC’s Vienna-based secretariat showed.
The report is OPEC’s first since it abandoned its production target of 30 million barrels a day at its meeting last week and doubled down on its decision last year to pump aggressively in the face of falling oil prices. The group’s report on Thursday signaled that plan had shown some success in driving out American production that requires higher prices, but the market overall hasn’t recovered, with Brent crude slumping below $40 a barrel in recent days.
OPEC members are counting on lower prices to drive strong demand in 2016. OPEC’s report said demand would grow about 1.25 million barrels a day, unchanged from its previous forecasts. That is down from 1.53 million barrels a day of growth in 2015.
The organization cautioned 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.”
OPEC said demand for its crude stood at 29.4 million barrels a day this year—lower than its current output, and a downward revision of 200,000 barrels a day from previous estimates. 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 trimmed its estimates for supplies from outside the group in 2016 as it expects the plunge in prices to take its toll on the U.S. oil industry and other rival producers in the coming months.
Estimates for non-OPEC output for next year were cut by 250,000 barrels a day to average 57.14 million barrels a day, the report said. The group said U.S. shale-oil production had been declining since April 2015.
“This downward trend should accelerate in coming months, given various factors, mainly low oil prices and lower drilling activities,” the report said.
OPEC raised its growth estimates for non-OPEC producers by 280,000 barrels a day to one million barrels a day, driven mainly by actual production data from the U.S., U.K., Brazil, Russia and China.
Corrections & Amplifications:
OPEC’s production in November was its highest since April 2012, an OPEC official said. An earlier version of the article said OPEC was pumping the most oil since 2009, according to publicly available figures from OPEC, but the official said the organization had revised its April 2012 estimates up to 31.7 million barrels a day without public notice. (Dec. 10, 2015)