Oil prices rise as Opec cuts production

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Opec production dipped in August (Source: Getty)

Output from the Organisation of the Petroleum Exporting Countries (Opec) fell in August for the first time since March.

The cartel's production dropped by 79,100 barrels per day (bpd) to 32.76m bpd last month, according to secondary sources that measure Opec output.

Opec also raised its outlook for global oil demand in 2017 and 2018 by around 50,000 bpd and 70,000 bpd respectively, saying the world will consume 96.77m bpd this year and 98.12m bpd next year.

Read more: Debate: Is the OPEC cartel’s output pledge sustainable in the long term?

The adjustment is mainly due to better-than-expected economic growth from OECD regions, which is expected to continue next year.

The news caused oil prices to rise somewhat, with global benchmark Brent crude lifting 0.84 per cent to $54.29 per barrel and US West Texas Intermediate (WTI) rising 0.31 per cent to $48.22 per barrel.

Opec is in the midst of a deal with non-Opec producers including Russia to cut production by 1.8m barrels per day until March 2018. The cartel hopes to prop up struggling oil prices by reducing the global supply glut.

That aim has been disrupted by Libya and Nigeria, which are exempt from the cuts, ramping up oil production . 

Libya's production fell by about 112,000 bpd to a total of 890,000 bpd last month, however.

Nigeria more than made up for that though with output shooting up by 138,000 bpd to reach 1.86m bpd.

Saudi Arabia's production dipped by around 10,000 bpd to just above 10m bpd.

Read more: Oil prices edge down following rising Opec exports and strong US output

Tags: Oil prices