Libyan Output Boosts OPEC Production

LONDON--OPEC's oil production rose to its highest in five months in July, boosted by the reopening of ports and oil fields in Libya, the oil producers' group said Friday.

In its monthly oil market report, the Organization of the Petroleum Exporting Countries said Libya's production rose by 200,000 barrels a day last month, bolstering the group's output by 167,000 barrels a day to total 29.9 million barrels a day.

The increase in production came after Libya's government reached an agreement with rebel forces in July to reopen oil ports and fields that had been closed for nearly a year, raising hopes that its exports could begin to rise.

However, despite last month's uptick, ongoing turmoil in the country has dented hopes of further improvements in its level of oil production. Fighting between militias at Tripoli airport has already upset operations at two large fields and several international major oil companies have evacuated staff.

Meanwhile a deterioration of the security situation in Iraq has for months shut in production in the country's north. Although the bulk of the country's oil fields in the south have so far remained safe, concerns have risen this week about the semiautonomous region of Kurdistan.

"Until recently, OPEC's hopes were pinned particularly on Iraq, as it was to shoulder two-thirds of the oil cartel's future production increases. However, the country is now sliding increasingly into chaos," analysts at Commerzbank said in a note.

Political turmoil in member states comes as the group is already contending with falling market share, challenged particularly by rising production in the U.S. Last year, OPEC's share of total global production averaged 43.4% down from 44.6% in 2012, according to the group's annual statistical report.

This year, OPEC expects demand for its oil to average 29.6 million barrels a day, a downward revision of 100,000 barrels a day compared with last month, it said.

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