According to the recent August report by the Organization of the Petroleum Exporting Countries regarding the recent changes in the crude oil market, the OPEC oil production decreased again during July compared with June’s oil production levels.
OPEC’s crude oil production decreased to 31,195 thousand bbl/d in July compared with 31,352 thousand bbl/d in June. This means the total OPEC oil supply slightly declined by 156.8 thousand during last month. Libya‘s oil production slightly fell by 40 thousand bbl/d to 1,394 thousand bbl/d. The current production levels are still nearly 10% belowLibya’s average oil production of 1,600 thousand bbl/d in 2010.Saudi Arabia’s oil production slightly declined by 50 thousand bbl/d. Iran’s oil production declined again by 173 thousand bbl/d and as a result if fell to 2,817 thousand mark – its lowest production level in recent years. On the other handIraq’s production rose by 115 thousand bbl/d.
The rest of OPEC countries nearly didn’t change their oil quotas during June 2012.
The oil supply of non-OPEC countries was revised up to an estimate of 53.18 million bbl/d in 2012, an increase of 0.69 million bbl/d compared with 2011’s oil supply. The estimated growth in non-OPEC oil supply in 2013 is 54.1 million bbl/d.
Assuming that during 2012 OPEC’s supply will remain for the rest of the year at the same level as during the first seven months of 2012 at 31.29 million bbl/d and adding to that OPEC’s NGL’s and non-conventional oil at an estimate of 5.67 the total global supply will reach in 2012 an estimate of 90.14 million bbl/d.
The total world oil demand forecast for 2012 is estimated to reach 88.72 million bbl/d – a growth of 0.9 million bbl/d or nearly 1% compared with 2011’s demand.
The estimated gap between supply and demand on a global will reach during this year a total of 1.42 million bbl/d (i.e. a surplus of 1,420 thousand barrels).
One interpretation of these figures is that if the production will remain at its current rate, if the oil market will continue to loosen up, then the prices of crude oil will not rise again as they did during 2011.
Nonetheless keep in mind, if OPEC were to cut its oil production (mainly Iran) to its 30 million bbl/d agreed upon quota, this could tighten the oil market and pressure up oil prices.
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