According to a new Bloomberg survey, OPEC's oil production rose even further in October, above tentative targets for reduced output. On Sept. 28, member states agreed to an aspirational production decrease to between 32.5 and 33.0 million barrels per day. This was meant as a blueprint for a long-term agreement to be finalized at a Nov. 30 summit in Vienna. The survey, however, estimates that the bloc's October output rose to 34.02 million barrels per day. The increase has not helped the global supply imbalance, and recent figures show that U.S. crude oil stockpiles shot up 14.4 million barrels the week of Oct. 28, the largest increase ever. The October OPEC figures highlight the bloc's challenge in finalizing a deal on cutting production, or implementing that deal if it is struck.

The increase in the bloc's output appears to have been largely driven by three members: Iraq, Nigeria and Libya. OPEC members tentatively agreed to exempt the latter two (in addition to Iran) from the tentative Sept. 28 agreement. The fact that production rose in the three exempted members a combined 400,000 barrels per day should come as no surprise. And it may rise more. According to an anonymous Bloomberg source, Libya's production has now reached 640,000 barrels per day — 174,000 above the survey estimate. Nigeria's oil minister also claimed a higher figure of 2.1 million barrels per day, which may rise following Shell's Oct. 28 reactivation of the Trans Niger pipeline.

Iraq's increase is harder to pin down but contributed to the overall rise. Bloomberg estimated Iraq's October output rose around 50,000 barrels per day. Baghdad rejects such figures culled from secondary sources, insisting that its higher internal estimates are more accurate. There is a strong motivation behind this. Baghdad is seeking an exemption from production cuts in light of the ongoing conflict and Mosul offensive and has an interest to ensure that higher figures are used. If Iraqi production is higher, OPEC is likely to grant higher long-term quotas in a final deal to cut production. In OPEC's most recent monthly report, Baghdad put its September output at 4.775 million barrels per day while the bloc's estimates based on secondary data indicated Iraq's actual output was only 4.455 million barrels per day. (The bloc's secondary figures do not use Reuters or Bloomberg but those of six other agencies.) The Iraqi government spent the past month trying to convince independent agencies its production levels are higher, inviting representatives to Baghdad and releasing field-by-field data. This seems to be working. Reuters revised their September estimates upward by 90,000 barrels per day.

Production is set to increase elsewhere, too. For example, the Dalia oil field in OPEC-member Angola was offline in October. When this returns to production, OPEC's overall output may rise substantially. In October, the country's output dropped by 230,000 barrels per day. The field's return to production as well as increases in Libya and Nigeria could boost OPEC's combined output to approach 34.25 million barrels per day or higher. If that happens, hitting the Algiers agreement target of 32.5 to 33.0 million barrels per day will require a cut of 1.2 million to 1.7 million barrels per day — 1 million barrels per day more than planned.

Next month, a flurry of OPEC working group meetings will be held to finalize a deal to cut oil output ahead of the Nov. 30 summit in Vienna. The most recent such gathering ended Oct. 29 without substantial progress on targets for cuts, how to implement them or precisely who (besides Saudi Arabia) should bear the brunt. Saudi Arabia and its Gulf Cooperation Council allies have offered to cut production by 4 percent. This, however, would only lower OPEC's output by 650,000 to 700,000 barrels per day. Far more is needed to reach the original target. The bloc may instead have to compromise, setting its aim instead at 33.25 to 33.50 barrels per day — effectively meaning that the originally proposed cut would turn into a freeze.