Opec crude oil production rose for the fourth month running in June to hit 31.75mn b/d, up 310,000 b/d on the previous month. This is the highest monthly average output the group has recorded since April 2012, and comes at a time when world markets are already awash with oil – a situation arguably created by the surge in US oil production growth since 2013, and exacerbated by Opec’s recent unwillingness to scale back production in the face of lower world oil prices. Opec has consistently been producing at above its self-imposed 30mn b/d production ceiling since May 2014, and above 31mn b/d since March this year.
But while this Opec ‘over-production’ shows no sign of abating in the months ahead, particularly when one factors in the Iranian upside should a nuclear deal materialize, a slowdown in US output growth since May has raised prospects that a slight easing of the oversupply situation could soon be on the cards. The US government’s energy arm, the Energy Information Administration (EIA) says it “expects US crude production declines to continue into early 2016,” when total output is forecast to average 9.2mn b/d in the first quarter. This is down from a record 9.7mn b/d in April 2015, the latest month for which the EIA has released complete data. (CONTINUED - 1095 WORDS)
