Advertisement

OPEC’s Production Hits High for Year : 21.3 Million Barrel Output Surpasses Cartel’s Ceiling

Share via
From Associated Press

OPEC nations boosted their crude oil production in June to its highest level so far this year, surpassing the cartel’s self-imposed output ceiling, according to estimates released today.

The International Energy Agency said in its Monthly Oil Market Report that the 13-nation Organization of Petroleum Exporting Countries pumped about 21.3 million barrels of crude a day last month, up 200,000 barrels a day from May.

The rise lifted second-quarter production to about 21 million barrels a day, topping OPEC’s self-imposed 19.5 million-barrel daily production limit.

Advertisement

The OPEC nations last month set their production ceiling at 19.5 million barrels a day for the last six months of the year--up 1 million barrels from the first-half quota--in an attempt to support a price of crude oil prices.

The ministers agreed to divide up the extra sales proportionately among all members, angering Kuwait and others that wanted a bigger share of the increase. Kuwait has stated it would not be bound by its individual quota.

The energy agency, a body of the multination Organization of Economic Cooperation and Development, predicted demand for OPEC oil would be about 20.9 million barrels a day in the second half of the year, about the same as the May forecast.

Advertisement

Michael Rothman, senior energy analyst at Merrill Lynch Capital Markets in New York, predicted OPEC in July will produce 20.5 million to 21 million barrels a day.

He said oil stocks already were high and demand was likely to slow, which could keep prices under downward pressure.

The average price for a basket of seven crudes monitored by OPEC was $17.62 a barrel at the end of June, sharply up from $12.34 at the end of November.

Advertisement

The July contract for West Texas Intermediate, the benchmark U.S. crude, traded at $21.00 a barrel late Wednesday on the New York Mercantile Exchange, up 73 cents from Friday’s close. The market was closed Monday and Tuesday for the Independence Day holiday.

OPEC has said data from nearly all its members shows they generally are adhering to their targets. The organization measures a nation’s quota by figuring crude production and the amount of oil put into, or drawn out, of stocks.

The energy agency estimated that Saudi Arabia, the world’s No. 1 crude exporter, produced 4.8 million barrels a day in June, compared to its OPEC quota of 4.5 million barrels a day.

“The major increase was in Iran, which was up 300,000 barrels a day (from May) to 2.8 million barrels a day (in June),” the report stated.

Iraq, like Iran, pumped about 2.8 million barrels a day, compared to a quota of 2.64 million barrels.

Kuwait produced about 1.6 million barrels a day, and the United Arab Emirates 1.7 million barrels, compared to their targets of about 1 million barrels a day.

Advertisement
Advertisement