OPEC out­put reaches 3-year high as Iran pumps most since 2012

The Pak Banker - - BUSINESS -

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.

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