Oil Supply Glut Is Growing As Opec Defends Market Share

The historic agreement between the six world powers, also known as the P5+1 and Iran over the country’s nuclear programme is expected to seep more barrels into the oil market in the coming months. OPEC production continued to rise by 0.43 mb/d from May to 31.71 mb/d in June or 1.71 mb/d above its production quota. OPEC’s supply has risen substantially by 1.3 mb/d since November when the cartel agreed its new strategy to defend market share at the expense of price. Saudi Arabia and Iraq are now producing close to record levels and account for more than half or 700k b/d of the upsurge in production. The high OPEC production has boosted Q2 2015 stockbuilding. In North America supplies rose as Canada increased production by a massive 80k b/d. In the US preliminary estimates show output rising by 0.14 mb/d in June according to Energy Aspects, although final readings may show sharp downward revisions. So far the US shale production has been far more resistant to lower oil prices than expected, says Nordea Global.

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