Iraq's exports of crude oil rebound

Iraq, holder of the world's second-largest oil reserves, exported 1.15 million barrels of crude a day in October, according to a Bloomberg survey of producers and analysts, almost triple the 400,000 barrels a day shipped in July.

October's exports were worth about $890 million, based on an average price of $25 per barrel. The value will surpass $1 billion this month assuming exports increase at the same 15 percent rate they did last month.

That assumption is consistent with a forecast from Iraq's State Oil Marketing Organization that the country will export 2 million barrels a day by March.

Rising oil exports will help fund Iraq's interim administration and may give President Bush an example of progress in the country as guerrilla attacks mount. Thirty-four US soldiers were killed in Iraq in the first eight days of November, the Associated Press said, equaling the number killed in all of October. A majority of Americans disapproves of how Bush is handling the Iraq conflict, according to a Newsweek poll completed Nov. 7. More oil from Iraq may also push crude oil prices lower. Crude oil for December delivery was little changed yesterday at $30.88 a barrel on the New York Mercantile Exchange, down 18 percent from a peak in March, prior to the war.

The rise in crude oil exports "certainly doesn't hurt" as the Bush administration tries to highlight areas of improvement in Iraq, said Michael Ledeen, a foreign policy scholar at the American Enterprise Institute in Washington.

Total Iraq production in October reached 1.86 million barrels a day in Bloomberg's survey, up from 850,000 in July. Before the start of the war, Iraq's output was 2.5 million barrels a day. US and Iraqi officials and oilfield contractors said last week that Iraq's oil output will continue to rise and may already be higher than the October data show.

Iraq production has climbed above 2 million barrels a day according to Thomas Krum, chief operating officer of Halliburton Co.'s KBR unit. Halliburton's work in Iraq's oilfields cost $1.6 billion through Oct. 16, according to the US Army Corps of Engineers in Washington.

Lieutenant General Robert Flowers, commander of the Corps of Engineers, said on CNN last week that output is more than 2.1 million barrels a day.

"I'm very skeptical about that," said Youssef Ibrahim, managing director of Strategic Energy Investment Group, which advises banks and oil companies on energy supply and geopolitical risk.

"I'd say that 1.5 million barrels is the maximum that they're pumping right now."

The US Energy Department said in a report last week that "not all of the Iraqi production is currently available for export to world markets." Officials' output tallies and forecasts include about 300,000 barrels a day that is being injected back into the ground because it can't be used or transported, the agency said. The forecast from the State Oil Marketing Organization that exports will reach 2 million barrels a day in March, is a 10 percent increase from the group's estimates in September. It remains well below the most optimistic projections that the Bush administration offered in the early days of the war.