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Why This Oil Rally Won’t Last

Why This Oil Rally Won’t Last

A combination of bullish factors…

OPEC Production Up 140,000 Bpd in April

OPEC oil

OPEC oil production rose by 140,000 barrels per day in April to 32.52 million barrels per day, according Wednesday’s S&P Global Platts survey.

Iran and Iraq each boost output by 150,000 barrels per day, while this was offset by losses elsewhere. Iraq hit output of 4.31 million barrels per day, while Iran hit 3.38 million bpd.

"Iran and Iraq's hefty production increases fly in the face of the failed Doha production freeze talks," the survey’s editorial directorship noted in a subsequent statement carried by media. "The question is how much higher can and will they go before production plateaus, because that would make a resurrection of a freeze plan at the June OPEC meeting more plausible."

Related: What OPEC Has To Fear From The New Saudi Oil Minister

Output also rose in the UAE and Indonesia, while the Saudis saw a 20,000-bpd decline in output to 10.18 million barrels per day. The reason for the decline was said to be field maintenance that cut volumes of Arab Heavy, the kingdom’s major export grade.

Both Nigeria and Kuwait saw production declines, with Kuwaiti April output falling to 2.68 million bpd, 100,000 bpd down from the month before. In Nigeria, April production dropped to 1.67 million bpd. Here, a resurgence in Niger Delta militancy and continued sabotage will likely show another drop in production for May.

Finally, Platts noted that production also fell in Venezuela and Ecuador. In Venezuela, low oil prices are compounding an already dire economic situation, while an earthquake in Ecuador negatively affected output.

By James Burgess of Oilprice.com

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