OPEC’s July output could be a record

Oil prices have fallen below the $40 per barrel mark as markets continue to worry about global oversupply of crude oil. Oil prices flirted with the $40 mark earlier this week, but finally took the plunge back into the 30s ahead of tomorrow’s crude oil inventory report.

Oil traders and investors expect the U.S. Department of Energy report tomorrow to show that U.S. crude oil inventories fell 1.4 million barrels last week after a surprise build broke a nine-week streak in inventory draws last week, reports Reuters. The American Petroleum Institute will issue its preliminary report today at 4:30 p.m. EDT Tuesday ahead of the government data.

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Despite the expected draw on U.S. crude oil inventories, the markets remain concerned about the glut as revised information on OPEC’s production shows the group may have pumped record-high amounts of oil in July. Supply from OPEC rose 100 MBOPD in July from June, reaching 33.41 MMBOPD, according to a survey from Reuters.

OPEC’s production has risen due to the return of former members Indonesia and Gabon as well, which skews historical comparisons. With supply adjusted to remove the two new members, OPEC produced roughly 32.46 MMBOPD, the highest on record in Reuter’s surveys going back to 1997.

The largest increase came from Iraq, which reportedly increased production 90 MBOPD, despite security concerns. Iraq’s oil and gas infrastructure continues to be a target for ISIS, with the Assyrian International News Agency confirming five deaths in Iraq at oil facilities Monday.

Iran, the fastest growing source of output for the group so far this year, added just 20 MBOPD to its production as the Islamic Republic nears existing capacity.

Nigeria was also able to export slightly more oil in July than in June despite continued attacks on oil infrastructure from militant groups trying to undermine the government.

Production from Saudi Arabia, OPEC’s largest producer, is believed to have remained relatively flat from June to July.


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