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Global production stable as Opec output hits five-month high

Higher Opec output is offsetting losses from outside

Global oil production increased by 230,000 barrels per day (b/d) in July, reaching 93 million b/d as higher Opec output offset losses from producers outside of the cartel. 

Opec’s oil production in July reached a five-month high of 30.44 million b/d, an increase of 300,000 b/d month-on-month. This was due to higher output from Saudi Arabia and Libya which offset losses in Iraq, Iran and Nigeria. 

Saudi Arabia’s crude output climbed to around 10.01m b/d in July, its highest level since September. The rise, an increase of 230,000 b/d from June, was partly the result of increased domestic consumption. 

Libyan supply increased by 190,000 b/d in July, to 430,000 b/d, despite the country sliding deeper into civil war. 

In Iraq, battles continue between both Islamic State (IS) and Kurdish Peshmerga forces. The US started a campaign of air strikes against IS positions on 8 August. Attacks on Iraq’s northern oil infrastructure by IS forces have choked production from the Kirkuk oilfield and other, smaller fields nearby.

The International Energy Agency (IEA) said the call on Opec crude and stock change remained at around 30.8m b/d in the fourth quarter of 2014, similar to that seen in the third quarter. The IEA has pegged the 2015 call at 29.9m b/d. 

Non-Opec production fell by 170,000 b/d month-on-month, to 56.2m b/d, due to declines in Brazil, Mexico, and Russia. Meanwhile, attacks on oil pipelines caused output in Colombia and Yemen to fall by 35,000 b/d and 40,000 b/d, respectively.

The IEA said global oil production was 840,000 b/d higher year-on-year, as a 1.2m b/d increase in non-Opec supplies more than offset a 360,000 b/d fall in Opec’s output. 

Meanwhile, OECD oil stocks posted their sixth consecutive monthly build in June, rising by 13.8m barrels on the previous month. Total industry stocks stood at 2.67bn barrels, the highest level since September 2013.

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