A Reuters’ survey found on Friday that OPEC oil output has risen to its highest in the month of March since October 2008 as higher supply from Iraq and further recovery in Libya's production offset a drop in shipments from Iran.

OPEC officials and analysts found that supply from the 12 members of the Organization of the Petroleum Exporting Countries has averaged 31.26 million barrels per day (bpd), up from 31.16 million bpd in February.

The survey also revealed that Iran exports are falling as some buyers stop or scale back purchases because of sanctions.

OPEC is pumping far more than its official production target of 30 million bpd. March's total is OPEC's highest since October 2008 despite fewer barrels from Iran.

"OPEC has been consecutively increasing production over the recent months and yet this has failed to translate in a material rise of OECD inventories from their five-year lows," said Harry Tchilinguirian, analyst at BNP Paribas. "This suggests to us that the market is not fundamentally developing a surplus."

The biggest increase in OPEC supply once again came from Libya in the month of March and the country's output continues to recover after being virtually shut down during the 2011 uprising against Muammar Gaddafi's rule.