Crude oil exports by OPEC members have gone up by more than 200,000 bpd so far in August, PetroLogistics data has shown, as cited by USB’s Giovanni Staunovo.
The total daily rate of oil exports from OPEC averaged 21.39 million bpd.
Iran’s oil exports have added 333,000 bpd so far this month, the data also showed. The total Iran has been exporting stood at 1.131 million, PetroLogistics reported.
Any news about export increases should be bearish for oil prices, but the recent news that OPEC and its OPEC+ partners are considering production cuts pushed prices higher as it highlighted the cartel’s power to direct supply in accordance with its interests.
In an interview with Bloomberg this week, Saudi Arabia’s energy minister said that “extreme volatility” was “undermining the market’s essential function of efficient price discovery”, in turn rendering it impossible for physical users to manage the costs of hedging or navigate the inherent risk.
“This vicious circle is amplified by the flow of unsubstantiated stories about demand destruction, recurring news about the return of large volumes of supply, and ambiguity and uncertainty about the potential impacts of price caps, embargoes, and sanctions,” Abdulaziz bin Salman told Bloomberg.
He noted once again constraints on spare production capacity and noted that the risk of supply disruptions remained considerable.
OPEC+ undershot its production target by 2.9 million bpd last month after it produced 2.84 million bpd less in June. The reasons seem to include those capacity constraints as well as some OPEC members’ problems with boosting production at all.
The latest export data from PetroLogistics suggests the final production figures for August might be better, but just how much better remains to be seen. In the meantime, the risk of OPEC+ reversing its production policies to cuts would be strongly bullish for oil prices.
By Charles Kennedy for Oilprice.com
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