Late last year, OPEC countries agreed to limit oil production in a bid to raise fast-declining prices. But the 11-country group has a history of not sticking to its promises, and it appears OPEC has been quietly increasing its barrels as the price of oil is expected to climb.
As Platts notes:
The latest Platts survey of OPEC and oil industry officials and analysts shows that OPEC volumes have risen for the fourth consecutive month. Total output, including that of Iraq, is estimated to have risen by 100,000 b/d to 28.57 million b/d in July from 28.47 million b/d in June.
Excluding Iraq, volumes from the 11 members bound by quotas edged up by 80,000 b/d to 26.12 million b/d in July from 26.04 million b/d in June, the survey shows.
That was confirmed by this U.S. Energy Information Administration in a statement today:
The combination of higher prices and OPEC’s historical tendency for weaker compliance with production targets over time suggests that OPEC crude oil production could rise over the remainder of the year, unless prices fall sharply from current levels. Rising global oil inventories and increasing tanker activity would seem to indicate that this past trend is continuing.
As the EIA notes, that means big money: $555 billion this year and $667 billion in 2010. Here’s the graph:
OPEC is scheduled to meet in September to review market conditions and to consider its production policy. It looks like we already know what they’re thinking.
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