11 Aug

OPEC’s Record Production Continues despite Crude Oil Prices

WRITTEN BY Gordon Kristopher

OPEC meeting

Crude oil prices have lost more than 29% from the peak of $62 per barrel in May 2015. One of the main factors of the fall in oil prices was the massive production from OPEC (Organization of the Petroleum Exporting Countries). In July 2015, OPEC’s crude oil output was at 32.107 MMbpd (million barrels per day), according to the consensus from Bloomberg. In June 2015, OPEC’s output was at 2.469 MMbpd—the highest since August 2012.

On August 10, 2015, delegates from member nations reported that OPEC isn’t in the mood for a production cut. There won’t be a meeting ahead of the meeting in December 2015.

OPEC’s Record Production Continues despite Crude Oil Prices

Last OPEC meeting

In the last meeting on June 5, 2015, OPEC decided to maintain its member nations’ collective target of 30 MMbpd for the next six months in order to offset lower crude oil prices and defend its market share. So, OPEC has been producing more than its output quota. OPEC’s record production is affecting oil prices.

Saudi Arabia produced 10.57 MMbpd of crude oil in July 2015. It’s the largest crude oil exporter in the world. Iraq produced 4.194 MMbpd of crude oil in July 2015. Iran’s crude oil production was at 2.85 MMbpd of crude oil in July 2015. Lifting the oil sanction could boost Iran’s output by 500,000 barrels within one week. The record production from these nations will add more pressure to crude oil prices.

US oil and gas producers like Chevron (CVX), Anadarko Petroleum (APC), and ConocoPhillips (COP) are also affected by lower crude oil prices. They account for 18.61% of the Energy Select Sector SPDR ETF (XLE). These stocks’ crude oil mix output is more than 41% of their total production. Oil and gas ETFs like the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and the Select Sector SPDR Fund ETF (XLE) are also affected by falling crude oil prices.

Latest articles

Since my last article about Nvidia (NVDA), the stock has risen from $196.86 to $208.57. I expect a further rise after today's earnings results.

TJX Companies (TJX) is scheduled to announce its fiscal 2020 third-quarter earnings results on November 19. Its third quarter ended on November 2.

AT&T stock is currently trending downward in today’s trading session. It’s down about 1% as of 11:52 AM ET. The stock fell after HSBC downgraded its rating.

Canopy Growth reported its second-quarter earnings results today. It's already down 16.07% on the day and is trading at 20.52 Canadian dollars on the TSE.

The EIA released its inventory report at 10:30 AM ET. WTI crude oil prices rose around 0.4% at 11:31 AM ET from their last closing level.

Alibaba stock has seen turbulence throughout the year, as the US and China have often been at odds. It fell around 2.4% on November 13.