The International Energy Agency reported today that crude oil output in OPEC reached a new record of 33.64 million barrels per day, causing crude oil prices to tick back down after they reached a one-year high on Russian President Putin's announcement that the oil giant would join freeze talks with OPEC.
Oil supply went up by 600,000 bpd globally in September, with non-OPEC supply rising by half a million barrels daily thanks to output increases in Russia and Kazakhstan.
World daily production in the reported month reached 97.2 million barrels, a 200,000-bpd increase on September 2015.
The IEA noted that OPEC was the main contributor to this annual growth.
Iraq achieved historic highs in production in September, and Libya reopened its export terminals and restarted production at some fields. The combined monthly increase in OPEC production in September stood at 160,000 bpd. Supply from the organization was 900,000 bpd higher than in September 2015.
For August 2016, the IEA reported a 300,000-bpd annual decline in global supply, thanks to output cuts outside OPEC.
On the demand side, the international watchdog said this year should see a 1.2-million barrel increase, keeping the same rate in 2017, too. In the third quarter of 2016, demand growth is estimated to have fallen to the lowest quarterly rate since 2012, on the back of an economic slowdown in OECD countries and a similar pattern in China, but in Q4 it should recover somewhat as the winter season in the northern hemisphere begins. Related: Are U.S. Oil Assets Too Expensive For Oil Traders?
Now that OPEC is discussing a possible freeze output, the latest from the IEA puts even more emphasis on the question of whether a freeze would be meaningful at all at these record-high levels of production. The cartel has scheduled several meetings in the coming weeks, before its November 30 get-together in Vienna, and any word that comes out of it is likely to swing markets immediately.
At the time of writing, Brent crude was trading at US$52.54 a barrel, down 1.13 percent from yesterday's close, and WTI was changing hands at US$50.68 a barrel, down 1.3 percent.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More