OPEC Market Share | Russell T. Rudy Energy LLC
As OPEC continues to increase production in its efforts to intensify pressure on U. S. shale drillers, the global oil glut continues. This in turn sustains downward pressure on prices. There has already been an oil glut for 5 consecutive quarters. According to the International Energy Agency, if OPEC continues producing at current rates this glut will continue through the third quarter, making this the longest glut since 1985. Many industry observers see the current oversupply extending through the end of 2015.
There are no indications that Saudi Arabia, OPEC’s largest member, will cut back. The cartel is currently producing 31.5 million barrels of oil per day (bopd), and looks well positioned to sustain this level of output. Assuming this level of production, there could be a global oversupply of 1 million bopd by the third quarter, based on current assumptions as to global demand and non-OPEC supply.
If sanctions on Iran are lifted the outlook is even more pessimistic. The Islamic Republic’s oil minister, Bijan Namdar Zanganeh, contends that the country could increase production by 1 million bopd within seven months of the repeal of sanctions. Given that nation’s dire economic straits they would likely do so, in spite of the downward effect this would have on prices.
To read the article in its entirety, please go to http://www.worldoil.com/news/2015/6/16/longest-oil-glut-in-decades-looms-as-opec-lifts-market-share .
