OPEC's oil output rises in June as it struggles to end supply glut

The Organization of Petroleum Exporting Countries on Wednesday said that its output increased by 393,000 barrels per day (bpd) in June compared to the previous month.

The total oil production from the 14 OPEC countries averaged 32.61 million barrels per day (bpd) in June, according to secondary sources, OPEC said in its latest monthly report.

The cartel is seen to be struggling in its efforts to end the global supply glut, as production rises again in Saudi Arabia, Nigeria, Angola, and Libya. 

"We expect OPEC will return to a strategy of production growth in 2018," Dubai-based Emirates NBD said in its commodity outlook report on Wednesday. "Six months into OPEC's plan to rebalance markets by limiting production in conjunction with partners, there are few signs of success nor do we expect that the second half of the year will see a substantial improvement."

Saudi Arabia’s crude production climbed 51,300 bpd to settle at 9.95 million bpd – just below the Kingdom’s agreed output limit of 10.058 million – data from secondary sources showed.

However, direct communication showed a jump of 190,000 bpd in Saudi Arabia’s June output at 10.07 million bpd – slightly above the production limit implemented by OPEC members in January in a bid to rebalance the global oil markets.

Global oil supply increased by 660,000 bpd to average 96.59 million bpd in June, compared to the previous month, driven by the rise in OPEC production and return in supply from Canada, the report said.

According to OPEC estimates, non-OPEC oil supply will average 57.82 million bpd in 2017, down 800,000 bpd from previous forecast. In 2018, non-OPEC supply is expected to grow by 1.14 million bpd to average 58.96 million bpd.

World oil demand is expected to average 96.4 million bpd in 2017 – broadly unchanged from previous month.

For 2018, world oil demand is anticipated to rise by 1.26 million bpd, slightly below the current year’s growth, to average 97.6 million bpd. 

Meanwhile, OPEC’s natural gas liquids (NGL) production in 2018 is expected to average 6.49 million bpd, partly due to Equatorial Guinea joining the producers group.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com