OPEC June output exceeds target

CAIRO - 12 July 2017: Oil production of the Organization of the Petroleum Exporting Countries (OPEC) surpassed the forecast in June to reach 32.61 million barrels of oil (mb/d), registering a monthly increase of 393,000 barrels of oil, according to OPEC’s monthly report.

The increase is attributed to higher production from Libya and Nigeria, which are both exempted from the output cut deal, in addition to an increased output by Saudi Arabia and Iraq, according to secondary sources that OPEC used to monitor the market.

Saudi Arabia produced 10.07 mb/d of oil last month, above the target it set for itself at the beginning of the year.

OPEC said in its report that oil demand in 2018 will be less than this year’s demand by 60,000 barrels of oil, to stand at 32.2 mb/d.

As the number of countries exempted from the OPEC deal to cut output increased, Libya and Nigeria have benefited from the exemption to boost their output. Both countries are responsible for 50 percent of the output rise, according to a Bloomberg survey this month.

The increased output might lead to an oversupply in the market, which could influence international crude oil Brent prices, which are expected to fall below the $40 level, according to another CNBC Oil Survey in July.