Oil prices are slightly down at the start of a week of trading which will end on Friday with OPEC’s meeting. Having said that, prices had risen by nearly 5% on Friday, so today’s losses are no doubt partly due to profit-taking. Surveys by Reuters and Bloomberg show that OPEC stepped up its crude oil production once again in May. According to Reuters output rose by 60,000 to 31.22 million barrels per day, and thus to its highest level since August 2012, whereas Bloomberg reports, OPEC output increased by 67,000 to 31.58 million barrels per day, notes Commerzbank. Both surveys found that Saudi Arabia was continuing to produce close to a record level. Falls in output in Libya and Nigeria were more than offset by increased production rates in Angola and Iraq. Thus OPEC is still producing well in excess of the official target figure of 30 million barrels per day and even more significantly above the call on OPEC, which the International Energy Agency estimates at an average of 29.2 million barrels per day this year.
There can still be no talk of the market showing signs of tightening, in other words, so it remains to be seen whether financial investors stay loyal to the oil market or begin to withdraw. Last reporting week saw speculative net long positions remain virtually unchanged at 251,000 contracts, added Commerzbank. The decrease in the oil rig count in the US accelerated again last week: according to Baker Hughes, 13 oil rigs were taken out of service, constituting the 25th weekly decline in a row.
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