OPEC oil production surges in June as demand picks up, survey finds
OPEC’s oil production surged in June as the group further eased supply restrictions in a pact with its allies and Iranian exports increased as part of ongoing talks to revive the country. its nuclear deal with world powers, a Reuters investigation showed.
LONDON (Reuters) – OPEC oil production surged in June as the group further eased supply restrictions under a pact with its allies and Iranian exports increased under ongoing talks on reviving its nuclear deal with world powers, a Reuters investigation showed.
The 13-member Organization of the Petroleum Exporting Countries pumped 26.24 million barrels per day (bpd) in June, according to the survey, up 740,000 bpd from May. Production has increased every month since June 2020 except February.
In the hope of a recovery in global demand, OPEC and its allies, known as OPEC +, decided from June 1 to further ease the record reductions in supply made in 2020.
OPEC + meets on Thursday, and analysts expect producers to discuss a further increase for August, while remaining cautious about the size of any increase.
“Market watchers believe the group will not rush easing with a large number,” said Stephen Brennock of broker PVM. “A weaker than expected oil return should ensure that the market continues to reduce inventories.”
The OPEC + deal allows for a 277,000 b / d increase in OPEC production in June compared to May, while Saudi Arabia pledged to add 350,000 b / d as part of a plan to gradually unwind a voluntary 1 million bpd reduction it made in February, March and April.
The group slightly exceeded the expected month-over-month increase, according to the survey. Membership in the promised cuts declined, but the group was still pumping less than expected in the latest deal.
OPEC’s compliance with the promised cuts was 115%, according to the survey, up from 122% in May.
The largest increase in June of 500,000 bpd came from Saudi Arabia as it continued to unwind its voluntary cut and increase production as part of the OPEC + boost on June 1.
With production stable in Iraq, OPEC’s second-largest producer, the second-largest increase came from Iran, which has managed to increase its exports since the fourth quarter despite US sanctions.
Iran exported more than 600,000 bpd in June, according to the survey, up from May’s rate. The country is exempt from OPEC supply restrictions.
Iran and the world powers have been discussing since April the relaunch of the 2015 Tehran nuclear deal, which would allow Iran to further increase its production. No agreement has yet been reached.
The third largest increase came from Nigeria, where exports picked up after a slowdown in May. Kuwait and the United Arab Emirates have increased production in line with their new quotas, according to the survey.
Among the two other producers exempted from restrictions, Venezuela managed to pump more while Libyan production fell after pipeline leaks.
The Reuters survey aims to track market supply and is based on shipping data provided by external sources, flow data from Refinitiv Eikon, information from trackers from tankers such as Petro-Logistics and Kpler, and information provided by sources from oil companies, OPEC and consultants. .
(Reporting by Alex Lawler; Additional reporting by Ahmad Ghaddar; Editing by Edmund Blair)