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How Producer Meeting and Inventories Are Affecting Crude Market

PART:
1 2 3 4 5 6 7
Part 5
How Producer Meeting and Inventories Are Affecting Crude Market PART 5 OF 7

How Iran’s Crude Oil Production Could Impact Producers’ Meeting

Iran’s crude oil production   

Iran is the third-largest OPEC (Organization of Petroleum Exporting Countries) crude producer. A Reuters survey estimated that Iran’s crude oil production was flat at 3.6 MMbpd (million barrels per day) in August 2016 compared to July 2016.

For more on OPEC’s crude oil production, read How Rising OPEC Crude Oil Production Is Affecting Oil Market and How Did OPEC’s Crude Oil Production Trend in August 2016?

How Iran’s Crude Oil Production Could Impact Producers&#8217; Meeting

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Iran’s crude oil production strategy 

On Wednesday, September 7, 2016, the National Iranian Oil Company’s (or NIOC) director for international affairs reported that Iran’s crude oil production was 3.8 MMbpd. Iran is targeting production of four MMbpd. It exported more than two MMbpd of crude oil in August 2016, according to data from the Joint Organizations Data Initiative.

On September 3, 2016, the Iranian oil ministry stated that it would support the oil producers’ meeting after it achieved pre-sanction levels of four MMbpd (million barrels per day). For more on the oil producers’ meeting, read parts one and four of this series and What Will Happen if the Oil Producer Meeting Succeeds?

Impact on crude oil, stocks, and ETFs 

High crude oil production from Iran will negatively impact crude oil prices. Lower crude oil prices negatively affect the earnings of oil and gas exploration and production companies like Swift Energy (SFY), Bonanza Creek Energy (BCEI), and Sanchez Energy (SN).

The ups and downs in crude oil prices also impact ETFs and ETNs such as the ProShares UltraShort Bloomberg Crude Oil (SCO), the Fidelity MSCI Energy (FENY), the Direxion Daily Energy Bear 3x (ERY), and the United States Brent Oil ETF (BNO).

For more bearish drivers, read Global Crude Oil Supply Outages Fell for 2nd Consecutive Month.

In the next parts of this series, we’ll analyze why the EIA revised US crude oil production estimates.

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