Why OPEC Crude Oil Production Rose in July 2017
Crude oil futures
US crude oil (XLE)(XOP)(USO) futures contracts for September delivery rose 0.1% and were trading at $45.81 per barrel in electronic trading at 1:25 AM EST today, on July 24. Prices rose ahead of the OPEC and non-OPEC monitoring committee meeting taking place today.
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OPEC crude oil production in July 2017
Market intelligence company Petro-Logistics predicts that OPEC’s crude oil production will have risen by 145,000 bpd (barrels per day) to 33 MMbpd (million barrels per day) in July 2017 compared to June. This forecast triggered oversupply concerns, and crude oil prices tumbled on July 21, 2017. For more on crude oil prices, read Part 1 of this series. Production might have risen due to the rise in crude oil production from Saudi Arabia, the United Arab Emirates, Libya, and Nigeria.
OPEC’s crude oil production is at its highest level so far in 2017. The EIA (U.S. Energy Information Administration) estimates that OPEC’s crude oil production rose by 290,000 bpd (barrels per day) to 32.62 MMbpd (million barrels per day) in June 2017 compared to June. OPEC production rose 0.9% month-over-month. But it fell 0.4% year-over-year. OPEC production is at its highest level since December 2016 OPEC meeting. Crude oil prices are down almost 20% so far in 2017 due to the rise in US crude oil production.
The rise in OPEC’s production and lower compliance with the production cut deal is bearish for crude oil prices. Lower crude oil prices have a negative impact on oil and gas producers like Northern Oil & Gas (NOG) and Stone Energy (SGY).
In the next part of this series, we’ll analyze crude oil prices next week.