Crude oil production at the OPEC decreased by another 246,000 bpd in July compared to June, when Saudi Arabia deepened its cuts, while US sanctions further reduced production in Iran and Venezuela and how an interruption limited production in Libya.
According to secondary sources of the OPEC it is closely followed Monthly report on the oil market published on Friday, total OPEC crude oil production averaged 29.61 million barrels in July, down almost 250,000 barrels since June and driven by lower production in Saudi Arabia, Iran, Libya, Venezuela and Nigeria . Iraq and Algeria recorded the largest increases in production, according to estimates from secondary sources of the OPEC.
The July raw production of cartel members is a multi-year minimum and is approaching the estimated production of 29.42 million barrels per day in the Reuters monthly survey, which found that OPEC production was at its lowest level eight years last month.
The Saudi Arabia, eager to contain the fall in oil prices in a marked bear market sentiment, has deepened its already profound cuts, cutting another 134,000 bpd to have its July production averaging 9.698 million bpd, showed the OPEC report. The Saudis have promised to keep production well below 10 million barrels, even if they do the fee is 10.3 million bpd—E exports of less than 7 million barrels a day, with the aim of tightening the market while demand growth weakens with dark macroeconomic prospects.
Iran and Venezuela, both subject to US sanctions, have also seen their production decline. Iranian production fell by 47,000 bpd from June to 2,213 million bpd in July and Venezuela's production dropped by 32,000 bpd to 742,000 bpd. Related: OPEC needs another cut of 1 million barrels per day to increase oil prices
Crude oil production in Libya, one of the wildest cards in OPEC in terms of safety production coherence, decreased by 42,000 bpd to 1,078 million bpd last month, after its largest oil field suffered two interruptions in two weeks. In the last week of July, Libya's production has fallen to a minimum of five months below 1 million barrels, after a new interruption in the Sharara oil field.
Even with the fall in OPEC oil production, the cartel sees OPEC's demand for crude oil next year even lower than its July production – at 29.4 million barrels, or 1.3 million less barrels compared to the 2018 level.
Commenting on the oil market and macroeconomic developments, the OPEC stated in its report:
"While the prospects for market fundamentals seem somewhat bearish for the rest of the year, given the slowdown in economic growth, continuing global trade issues and the slowdown in oil demand growth, it remains critical to monitor closely the ; balance between supply and demand and helping market stability in the months ahead. "
By Tsvetana Paraskova for OilScore
Other best readings from OilScore: