OPEC’s Output Still Too High to Stop Price Slide
OPEC cut back oil production only modestly in June, not enough to reduce a surplus that has driven down crude prices by a third this year, industry sources said Friday.
A monthly Reuter survey of oil industry and shipping sources estimated that production by the Organization of Petroleum Exporting Countries fell by a modest 270,000 barrels to 23.11 million barrels per day in June.
It could turn out lower, perhaps at 22.8 million barrels, if the low end of a range of estimates were used for two of the cartel’s 13 exporters, Iran and Kuwait. All monitors of OPEC production agree that they are notoriously hard to pin down.
Even so, quota violations mean that output still exceeds OPEC’s target of 22.1 million barrels daily.
It also remains above the goal of 22.5 million, which several ministers privately called “realistic” when a stopgap output pact to try to mop up a glut in the market and rescue sliding prices was agreed to in Geneva on May 3.
Spot crude oil on the New York Mercantile Exchange was quoted Friday at $17.12 per barrel, off 3 cents from Thursday’s close. Oil prices began the year much higher at $24 a barrel.
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