Opec oil output is rising in March as higher supply from Iran after the lifting of sanctions and near-record exports from southern Iraq offset maintenance and outages in smaller producers, according to a new report.

Opec oil output is rising in March, a Reuters survey found, as higher supply from Iran after the lifting of sanctions and near-record exports from southern Iraq offset maintenance and outages in smaller producers.

The survey also found no major change in production in top exporter Saudi Arabia - another sign that Riyadh is serious about freezing output to support prices, which hit a 12-year low near $27 a barrel in January but have since recovered to $40. Producers are meeting on April 17 in Qatar to discuss the plan.

"The production freeze has put a floor under the price," said Carsten Fritsch, analyst at Commerzbank. "We see a risk of a short-term setback if the meeting produces a disappointment."

Supply from the Organization of the Petroleum Exporting Countries has risen in March to 32.47 million bpd from 32.37 million bpd in February, according to the survey, based on shipping data and information from sources at oil companies, Opec and consultants.

The biggest rise came from Iran following the lifting of Western sanctions in January. Tehran, which wants to recover market share it lost under sanctions, has said it will not take part in the production freeze.

Iran has increased output by 230,000 bpd since December, according to Reuters surveys. Iranian officials say the increase in supplies is much larger.

Iraq, Opec's largest source of supply growth in 2015, managed to raise output. An increase in southern exports to what may be a new record in March offset disruption to flows along a pipeline carrying oil from the Kurdish region.

Angolan exports rose. In countries where output has fallen, the drop was the result of outages and maintenance rather than voluntary restraint.

Output declined in the United Arab Emirates, where work on oilfields that produce Murban crude is curbing production. The maintenance will not be completed until April.

There was a further decline in Nigeria due to a whole month of disruption to the Forcados crude stream operated by Royal Dutch Shell's local venture, but this was partially offset by higher supply of other grades.

Libyan output, already at a fraction of rates seen before the country's civil war, fell due to a power outage. Supply in Venezuela edged lower.

Saudi Arabia kept output steady compared with February, sources in the survey said, citing stable to slightly lower exports in March. Saudi production was assessed at 10.18 million bpd versus 10.20 million in February.

Opec production has surged since the group in November 2014 abandoned its historic role of cutting supply alone to prop up prices, in the hope that lower prices would curb the growth of more costly-to-develop competing supply sources.

The extra Opec crude added to a global glut, and this year's output freeze agreement represents the first cooperation on supply policy between Opec and non-Opec since 2001.

Oil falls as US crude stocks hit record

Meanwhile, oil futures fell in Asian trade on Thursday amid renewed worries of global oversupply after official data showed US crude inventories rose last week to a record for the seventh time in a row.

That increase came despite seasonal refinery utilisation hitting an 11-year high, while a rise in the dollar index put further pressure on oil prices.

Brent crude futures fell 22 cents to $39.04 a barrel as of 0136 GMT. It ended up 12 cents in the previous session, after touching a session peak of $40.61.

The front-month contract for US crude futures dropped 26 cents to $38.06 a barrel, after settling up 4 cents in the previous session following a gain of 3 percent earlier in the session.

Prices will "zig-zag" for the rest of the year, said Tony Nunan, oil risk manager at Japan's Mitsubishi Corp.

"Commercial inventories will continue to build until May or June. The bearish sentiment (on prices) will continue until we actually see inventories draw down," said Nunan.

Oil prices, which have risen about 50 percent since mid-February, have started to track lower in the past week.

"Oil prices will trend down again ... $35 a barrel will be the support level. Low prices are not sustainable in the long-run," Nunan said.

But with Opec flagging a price of $50 a barrel and oil producers scheduled to meet in Doha on April 17 to discuss a possible output freeze, prices are likely to remain range-bound.

"Anytime prices get close to $45-$50 a barrel, funds that have taken long positions are likely to take profits. Unless things really ignite the global economy, then people will sell-off at that level," Nunan said. – Reuters