The oil price fell after rising OPEC production
At the end of last week the price of oil fell sharply. Extraction of crude petroleum by OPEC countries last month has increased, which was the first increase since the beginning of the year, the group and its allies launched a new round of production cuts to support a weak global market. According to a survey by Bloomberg, Nigeria and Saudi Arabia led the Organization of countries-exporters of oil, which in aggregate increased by 200 000 bpd to 29.99 million Survey based on estimates of officials, the data for the tracing and consultants, including the Rystad Energy and JBC Energy GmbH.
OPEC and its partners, a coalition of 24 countries, known as OPEC +, agreed to cut production by 1.2 million barrels per day in early 2019, as uncertain global economy and the rapid growth of shale oil in the United States is threatened by oversupply. This transaction replaced the previous round of agreements, which began in January of 2017. The organization fought for the strengthening of prices on the background of deteriorating prospects for global growth and a seemingly intractable trade war between the US and China.
Futures on Brent crude fell by more than 20% compared to the peak reached in April, and was trading at around $ 59 per barrel on Monday. Although Saudi Arabia increased production last month, the Kingdom still reduces much more than was promised in the agreement with OPEC +, because it is making additional efforts to balance the market. Riyadh increased production to 50,000 barrels a day to 9.83 million when domestic consumption usually grows with the growing use of air conditioners.
Significant reductions planned by Saudi Arabia, currently the only balance the actions of other members of OPEC. Nigeria have not made any of the promised reductions, and again production increased in August by 60,000 barrels a day to 1.95 million, the highest level since the beginning of 2016. A West African producer has increased production to maximum levels at its new offshore oil field.
Russia, the largest producer outside OPEC in the coalition, has also shown signs of retreat from their obligations. The country produced 11,294 million barrels per day in August, which is 104 thousand per day is more than the limit in accordance with the agreement of OPEC.
The Committee, consisting of key members of the OPEC Alliance +, will gather in Abu Dhabi on September 12 to review progress in stabilizing the global crude markets. Then the full coalition will meet in December in Vienna to consider any action necessary in 2020.
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