Increased production in Iran and Iraq continue pushing OPEC production higher
In OPEC’s April Monthly Oil Market Report, secondary sources showed production for the group rose from February to March. Total OPEC production was up 14.9 MBOPD due to increased production from Iran and Iraq. Crude oil production for the group as a whole reached 32.23 MMBOPD.
The combined OPEC and non-OPEC meeting to discuss a production freeze, which helped to push oil prices back above $40 per barrel, will be held this Sunday in Doha, Qatar. The deal is likely to do very little for oil market fundamentals as Iran, which had the largest increase in oil production month-to-month, has repeatedly said it will not take part in the production freeze.
“We believe that any agreement to freeze output which excludes Iran would largely be an acknowledgement of existing conditions at the main participants,” said a note from UBS today. “Current spare capacity is confined mainly to Saudi, and we believe that the prospects for capacity growth elsewhere within OPEC are limited.”
U.S. production fell below 9 MMBOPD according to a note from BMO today. The news gave some support to crude oil prices after a 6.6 MMBO build in U.S. inventories.
