OPEC output reaches 3-year high as Iran pumps most since 2012
OPEC pumped the most crude last month in more than three years as Iran restored output to the highest level since international sanctions were strengthened in 2012.
The Organization of Petroleum Exporting Countries, responsible for 40 percent of world oil supplies, raised output by 100,700 barrels a day to 31.5 million last month, the group said in its monthly market report, citing external sources. This increase came even as Saudi Arabia, which often curbs output toward the end of peak summer demand, told OPEC it cut production by the most in almost a year.
Oil prices slumped to a six-month low below $50 a barrel in London last week as rising OPEC supplies, resilient U.S. production and concerns over Chinese demand prolong a global glut. Iran reached an accord with world powers on July 14 that may ease sanctions on its oil exports later this year in return for curbing nuclear activity.
"Given the better-than-expected growth in global oil demand so far this year, together with some signs of a pickup in the economies of the major consuming countries, crude oil demand in the coming months should continue to improve and, thus, gradually reduce the imbalance in oil supply-demand," OPEC's Vienna-based secretariat said in the report.
Iran increased output by 32,300 barrels a day in July to 2.86 million a day, the highest since June 2012, according to data OPEC compiles from "secondary sources" such as media agencies and international institutions. Sanctions to deter the nation's nuclear research took effect in July that year.
The report also includes data direct- ly submitted by its 12 members. In these figures, Saudi Arabia said it reduced output in July by 202,700 barrels a day to 10.36 million. That's the biggest reduction since August 2014. A group total was unavailable for these statistics because Libya didn't provide a production estimate. OPEC increased estimates for global oil demand in 2016 by about 100,000 a barrels a day. World consumption will climb by 1.3 million barrels a day, or 1.4 percent, to 94 million barrels a day in 2016. The growth rate is slightly lower than this year's projected 1.5 percent expansion.