Survey: OPEC keeps plugging away

Output from 12-member group increased for fourth straight month.

By Daniel J. Graeber

HOUSTON, July 7 (UPI) -- Output from Saudi Arabia and Iraq helped lead to the fourth straight monthly increase from the Organization of Petroleum Exporting Countries, a survey found.

A survey by energy reporting service Platts finds OPEC production in June reached 31.3 million barrels per day, a 5.5 percent increase from May and the fourth straight month of gains from the 12-member group.


Saudi Arabia, the de facto leader of OPEC, produced an average 10.3 million bpd in June, about 1 million barrels more than the United States.

The increase in production from U.S. shale basins is keeping markets weighted on the supply side. Saudi Arabia has said it would keep its output higher despite the glut in an effort to stay competitive and keep its Asian consumers satiated.

Though Iraq is still struggling to contain the rise of the terrorist group calling itself the Islamic State, production from the south of the country, which is largely isolated from violence, has increased 330,000 bpd to more than 3 million bpd, Platts found.

Margaret McQuaile, a senior oil correspondent for Platts, said June production levels were the highest for OPEC since August 2012.


"At that point, output was on the way down," she said in an emailed statement. "Now, output seems to be on the way up, and at a time when the market could be looking at a lot more oil from Iran."

Iran's oil sector is limited by existing sanctions. More oil from the Islamic republic could find its way to the global market if negotiators working in Vienna are able to formalize a deal that would pull Iran back from the brink of developing the technology needed to manufacture a nuclear weapon.

In OPEC member Libya, meanwhile, production of around 410,000 bpd is still far below its full potential because of ongoing security issues. Platts found, however, the state-run oil company in Libya is optimistic that it can increase production.

OPEC releases its next monthly market report Monday.

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