OPEC crude output declined this month as Iraqi production slipped from a record in June.
Output by the Organization of Petroleum Exporting Countries decreased 362,000 barrels to 32.107 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Last month’s total was revised 335,000 barrels higher, to 32.469 million a day, because of changes to the Saudi, Kuwaiti, Angolan and Nigerian estimates.
Brent crude, the benchmark for more than half the world’s oil, relapsed into a bear market this week on speculation that the global supply glut will grow. OPEC agreed on June 5 to retain its collective output target of 30 million barrels a day, a level that it’s exceeded for 14 months, according to data compiled by Bloomberg.
“Prices are going to remain under pressure because output is near record levels in several OPEC countries,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone.
Brent for September settlement fell $1.10, or 2.1 percent, to end the session at $52.21 a barrel on the London-based ICE Futures Europe exchange. It was the lowest close since Jan. 29.
Iraqi production dropped 194,000 barrels a day to 4.194 million this month, according to the survey. Iraq, OPEC’s second-biggest producer, was responsible for more than half of the total decline this month. Exports from the south of the country through the Persian Gulf rose to a record while there was a larger dip in shipments from the north through the port of Ceyhan on Turkey’s Mediterranean coast.
Saudi Arabia, OPEC’s top producer, increased output by 70,000 barrels a day to 10.57 million in July, the most in monthly Bloomberg data going back to 1989. Fuel consumption in the Arabian peninsula peaks in the summer months, when high temperatures lead to increased use of air conditioners.
Iranian production was steady at 2.85 million this month. The nation pumped more than 3.1 million barrels a day from 1991 until July 2012, when additional sanctions were imposed on the Islamic republic to curb its nuclear program.
After its nuclear accord with world powers this month, Iran will focus on regaining market share it lost due to sanctions, regardless of the impact on prices, Oil Minister Bijan Namdar Zanganeh said July 20 in Tehran. The nation is seeking to produce almost 4 million barrels a day within seven months of sanctions being removed, expanding to 4.7 million as soon as feasible after that, Zanganeh said.
Libyan output slipped 20,000 barrels a day to 380,000 this month. The country’s current output is about a third of what it was before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule.