Iraq production growth pushes OPEC output beyond its own quota for the 12th straight month
OPEC continued to increase production in May, following its November plan to defend market share. OPEC output increased by 67 MBOPD from April to reach 31.579 MMBOPD in May, Bloomberg reports. This marks the 12th consecutive month that the group has exceeded its monthly quota of 30 million barrels of oil per day.
Iraq led the 12-country group in production increases, accelerating output by 197 MBOPD to a record 3.87 MMBOPD. The nation also shipped an all-time high of 3.15 MMBOPD in May, according to a spokesman from the Iraqi Oil Ministry.
Production in Saudi Arabia, the group’s largest producer, remained steady at about 10.25 MMBOPD in May.
“OPEC continues to increase production, with Saudi Arabia and Iraq producing 1.10 million barrels a day more than at the last meeting,” said Ole Hansen, head of commodity strategy at Copenhagen-based Saxo Bank A/S. “Until we see fresh new demand, the oil price will be allowed to drift lower as we have seen the top of the market.”
Representatives of OPEC’s Economic Commission Board, which reviews the market before ministers meet in Vienna on June 5, confirmed the group’s prior outlook for 2015, projecting that the need for its crude will rise in the second half of the year, reports BNN. Some analysts are predicting OPEC will raise its output target higher at Friday’s meeting, reports London’s Financial Times.
U.S. Production Highest in 43 Years
The Energy Information Administration (EIA) reported U.S. crude production rose to 9.57 MMBOPD for the week ended May 22, 2015, surpassing the previous high of 9.42 MMBOPD seen in March. The new record set in May marks the highest production in the United States since May 1972.
Russia also continues to maintain production at near-record levels, with oil and natural gas production up 1.6% from May of last year at 10.71 MMBOPD. Crude oil exports reached 5.06 MMBOPD, up about 2% from a year ago, but down 5.7% from April, reports the Washington Post.