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Page added on August 18, 2015
OPEC May Boost Oil Output to Record With Iran Back Amid Glut
OPEC could potentially boost crude oil production to 33 million barrels a day, the most ever, after international sanctions are removed against Iran amid a global supply glut, according to the country’s OPEC representative.
The global oil market is already in surplus by about 3 million barrels a day, with Saudi Arabia and Iraq responsible for OPEC’s oversupply in the past six months, Iran’s state-run Islamic Republic News Agency reported Sunday, citing Mehdi Asali. Iran can boost output by 500,000 barrels a day within one week after sanctions are lifted, Oil Minister Bijan Namdar Zanganeh said earlier this month.
Crude has lost half its value in the past year as U.S. production jumped to the highest level in more than 40 years and Saudi Arabia had record output. Prices collapsed after the Organization of Petroleum Exporting Countries decided on Nov. 27 to maintain production rather than sacrifice market share.
Brent oil for October settlement was trading at $49.01 a barrel, down 0.4 percent, at 1:18 p.m. London time Monday. Prices have fallen about 15 percent this year. High supplies in North America and OPEC, lack of demand growth and the strengthening dollar are all cause for the lower oil prices, Asali said.
OPEC pumped 32.1 million barrels a day in July, the 14th consecutive month that the 12-nation group has produced more than its collective target of 30 million barrels, data compiled by Bloomberg show. The 12-member group’s all-time high output was 32.8 million barrels set in July 2008, the data shows.
Iran made a “big mistake” when it backed OPEC’s decision in December 2011 to discard individual production quotas, Asali said. That allowed Saudi Arabia, Kuwait and other members to take over Iran’s share which was diminishing because of sanctions, he said.
9 Comments on "OPEC May Boost Oil Output to Record With Iran Back Amid Glut"
Truth Has A Liberal Bias on Tue, 18th Aug 2015 6:16 pm
Iran will over the next year or so increase production by approx 750,000 barrels. The global oil production total will decrease as Iran production will not replace global depletion.
Saudi Arabia is peaking and this little production binge was some sort of smoke and mirrors psy-ops gamble to undermine highly leveraged marginal production i.e. LTO.
It won’t be long until the Saudi Royals move to southern France and the country formerly known as KSA trainwrecks. The king is just giving the kingdom one more squeeze so as to leave as little behind as possible once he abandons the land to the squabbling masses.
James Tipper on Wed, 19th Aug 2015 12:21 am
@Truth
Good points, I’ve heard it repeated that once Saudi Arabia peaks, the world will have peaked. I think there’s a great deal of truth to that statement. After all in the next 30 years or so we need about 3-4 new Saudi Arabias worth of oil and production. Seems pretty unlikely that that is going to happen.
Iran will be a short increase but they peaked a long time ago. They really won’t be a major new player in the long run. Do you have any more evidence though that Saudi Arabia will peak? Like some graphs I could look at?
Pat on Wed, 19th Aug 2015 12:26 am
It’s that all the easy 85% oil in the world already burned away and only the bottom glu is left to call production or highly costly extraction. the ability of the world to continue extraction of bottom scrap is becoming highly unproductive with limits of everything and highly diminishing returns. The world oi age is coming to end, the oil left to be sucked out will find suddenly vanish..
BobInget on Wed, 19th Aug 2015 9:49 am
Headline should read “Consumption raised to 20,500,000 barrels or 2.9 % OVER last year this time”.
Instead, Foreign Imports, Not domestic production, drove oil prices lower and dollar higher.
Note: 8 million barrel p/d imports are a half million barrels p/d higher then last year when consumption was 3% lower.
It’s apparent, simply flooding the market with cheap crude keeps prices in check despite
consumption rising an astounding 100,000 B’s
Per Day for the last five weeks.
What a trap.
Summary of Weekly Petroleum Data for the Week Ending August 14, 2015
U.S. crude oil refinery inputs averaged about 16.8 million barrels per day during the
week ending August 14, 2015, 254,000 barrels per day less than the previous week’s
average. Refineries operated at 95.1% of their operable capacity last week. Gasoline
production increased slightly last week, averaging over 10.2 million barrels per day.
Distillate fuel production decreased last week, averaging about 5.1 million barrels per
day.
U.S. crude oil imports averaged over 8.0 million barrels per day last week, up by 465,000
barrels per day from the previous week. Over the last four weeks, crude oil imports
averaged 7.6 million barrels per day, 0.9% below the same four-week period last year.
Total motor gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged 869,000 barrels per day. Distillate fuel imports averaged
201,000 barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum
Reserve) increased by 2.6 million barrels from the previous week. At 456.2 million
barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at
least the last 80 years.
Total motor gasoline inventories decreased by 2.7 million barrels
last week, and are in the middle of the average range. Finished gasoline inventories
increased while blending components inventories decreased last week. Distillate fuel
inventories increased by 0.6 million barrels last week but are in the middle of the average
range for this time of year. Propane/propylene inventories rose 1.1 million barrels last
week and are well above the upper limit of the average range. Total commercial
petroleum inventories increased by 0.8 million barrels last week.
Total products supplied over the last four-week period averaged 20.5 million barrels per
day, up by 2.9% from the same period last year. Over the last four weeks, motor gasoline
product supplied averaged 9.6 million barrels per day, up by 6.5% from the same period
last year. Distillate fuel product supplied averaged over 3.7 million barrels per day over
the last four weeks, down by 6.6% from the same period last year. Jet fuel product
supplied is up 2.2% compared to the same four-week period last year
Danlxyz on Wed, 19th Aug 2015 10:06 am
If “The global oil market is already in surplus by about 3 million barrels a day”, then inventories must be going up.
Where are these 3 million barrels per day being stored? US total stocks are up about 800,000 barrels from last week, so not much is here. Wouldn’t storage tanks fill up pretty fast at that rate? Are there 20 tankers in floating storage being added each week?
The world is a big place, but I wonder about 3 million barrels surplus each and every day.
BobInget on Wed, 19th Aug 2015 11:14 am
‘Truth’ as usual, turns out to be bang on.
In response to Dan, Notice that oil consumed by US military, oil never imported (into US) goes unreported.
The Saudis may well be raising production, at some risk, I might add, nowhere is it being said KSA is about to EXPORT more oil. Look up “KSA bombs Yemen”. Look up Saudi Arabia and Syria.
KSA and Egypt, Pakistan, Turkey, Iraq.
Iran and KSA are locked in a death struggle.
Other suffering OPEC members are just ‘collateral damage’.
Everyone really doesn’t seem to grasp this fact entirely.
The most obvious OPEC victim, Venezuela.
A reminder, Venezuela is second only to Saudi Arabia in actual reserves. Much this crude locked up in the Orinoco Basin in heavy oil or ‘oil sands’.
In June, Russia took technical charge of Venezuela’s Orinoco heavy oil deposits.
China took control of Ven’s funding.
These moves by Russia and China are as significant (to the US) as if Saudi Arabia’s exports were controlled by famed “Islamic State”.
Venezuela is at this point totally dependent on China for additional loans keeping that oil exporter afloat. Venezuela’s plight means US imports can, if China wishes, US exports can be cut off entirely or diminished significantly.
Keep in mind, Americans are actively protecting Mideast oil supplies in Iraq and Saudi Arabia and will be for decades more of oil wars wrapped in religious robes.
Americans are being led into a trap of utter dependance on horrendously expensive Saudi Oil.
Canada remains, America’s most dependable,
reliable, perhaps, last crude resource.
Bottom line, all this talk of the US once again becoming a net exporter of crude is fantasy at best, cruel propaganda at worst.
joke on Wed, 19th Aug 2015 12:28 pm
Bumpy plateau anyone?
Danlxyz on Wed, 19th Aug 2015 1:50 pm
Thanks Bob, I never would have thought of that. Is someone storing up fuel for a nice little war?
theedrich on Thu, 20th Aug 2015 3:25 am
Nowadays there is a lot of hyperventilation over the proposed treaty with Iran, mostly by Repubs, but also by some pretty influential Demons. If one overviews the situation as dispassionately as possible, however, it appears that the treaty is one of the very few beneficial things that the current POTUS has managed to accomplish. The argument against it seems to boil down pretty much to the fact that Iran keeps mouthing meaningless death threats against Israel and, as a corollary, against the U.S. However, as opposed to words, it so happens that the most vicious actions (à la 9/11) have actually been perpetrated by Saudi Sunnis. The ISIL and Al Qaeda types are all Sunnis, often underhandedly funded by oily moguls in KSA and Qatar. However much the Iranian Shiites may hate us and breathe fire, they are far more rational than the Sunnis, who are manipulated by the megabuck masters of Mecca. It is really in the best interest of the United States to come to some kind of an accommodation with Iran instead of perpetuating our sickening symbiosis with the diseased sociopaths of Araby.