Iraq and Saudi Arabia, OPEC’s two largest oil producers, have signalled a renewed effort to enforce production cuts after their respective ministers met in Jeddah.
OPEC output in July rose to 32.87 million barrels per day (bpd) from 32.69 million bpd in June, taking it further above last year’s agreed limit of 32.5 million bpd. The July figures revealed that 14 countries raised their production in July, including Saudi, which has been one of the staunchest advocates for the OPEC-led production cuts. The estimated demand for OPEC oil is estimated at 32.4 million bpd, so the cartel is producing more than the world needs, casting doubt on its efforts to reduce the global stockpile.
According to the Saudi Press Agency, Khalid al Falih, the Saudi energy minister, and his counterpart Jabbar al Luaybi in Iraq are looking to coordinate their respective oil policies.
In the US, meanwhile, the EIA’s Short-Term Energy Outlook (STEO) has downgraded its predicted growth in oil production for 2018, although the average US crude production for 2018 has been revised upward, indicating a case of less growth later because of more growth sooner.
Booming US shale production has hindered efforts to clear global inventories recently, with oil major ExxonMobil, whose lubricants are available from Mobil UK stockists, investing heavily in the Permian Basin recently.
On a more positive note, the STEO also raised the EIA’s projected estimates for demand growth in 2017 to 340,000 bpd from 310,000 bpd.