OPEC Crude Oil Output at Highest Since 1979

LONDON – OPEC's oil production rose 290,000 barrels per day in July to the highest level since December 1979 as Iraq boosted exports and the United Arab Emirates (search) restored output at oilfields after maintenance, a Reuters survey showed.

Record crude oil prices have encouraged the Organization of the Petroleum Exporting Countries (search) to push output to near 26-year highs.

But opening the taps has had little effect on prices. U.S. light crude hit a fresh record of $62.50 a barrel on Wednesday.

"OPEC is producing as much crude oil as anybody wants," said Geoff Pyne, energy consultant for Standard Bank. "Refiners have no shortage of the grades they need. But it's out of OPEC's hands to bring the price down."

Prices have rallied to records this year on concern that a stretched global refining system would struggle to meet rapidly growing fuel demand.

Total July OPEC output came to 30.24 million bpd, according to the survey of consultants, shippers, industry and OPEC sources. That was up 290,000 bpd from revised June output of 29.95 million bpd.

Iraq saw the largest increase in output at 160,000 bpd, as it boosted sales of exports from storage in Turkey in July.

The Iraqi export rise was unlikely to be sustained, consultants said, as there have been few exports through the pipeline since. The line has mostly been idled by sabotage attacks since the U.S.-led invasion of Iraq in 2003.

Output from OPEC's 10 members excluding Iraq, which is exempt from quotas, was at 28.21 million bpd in July, up from revised output of 29.09 million bpd in June.

OPEC-10 production was 210,000 bpd above the target of 28 million bpd, which came into effect on July 1 after OPEC raised the ceiling 500,000 bpd at its meeting in June in a bid to dampen prices.

The UAE's ouptut rose around 80,000 bpd to 2.44 million bpd in July from a revised figure of 2.36 million bpd in June as it brought its Umm Shaif (search) and Lower Zakum (search) fields back on line after work and offered buyers extra volumes of crude.

July figures were revised down as its biggest oilfield, Murban, took a little longer to return from maintenance in June than expected.

Exports are set to increase further in coming months as the UAE poosts export capacity at its biggest Murban field by 200,000 bpd to 1.5 million bpd by early 2006.

OPEC's largest exporter, Saudi Arabia, boosted output by around 40,000 bpd to 9.52 million bpd.