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Saudi Arabia: OPEC oil prices hit four-month low in July

July 28, 2015

On 28 July, the average price of the Organization of Petroleum Exporting Countries (OPEC) oil basket stood at USD 50.54 per barrel. The reading marked a 14.5% decline over the same day of the previous month—the lowest price since the end of March. On an annual basis, oil prices were down by 51.9%.

After recovering some of the ground lost since mid-2014 in Q2, oil prices started upon an almost uninterrupted downward trend in July. This tendency mainly reflected expectations of a near reintegration of Iran into the world’s economy following the successful nuclear accord between the Persian country and international powers, with could strongly boost oil supply. The recent turmoil in China’s stock market, resilient production in the United States, increased crude supply by key OPEC players and a strong U.S. dollar also contributed to the plunge in oil prices. The overall picture suggests that global crude markets remain oversupplied.

Although the OPEC decided to maintain its oil production quotas at 30 million barrels per day (mbpd), the oil cartel pumped 31.38 mbpd in June, according to the latest OPEC Monthly Oil Market Report. The rise reflected stronger production in Iraq, Nigeria and Saudi Arabia. Saudi Arabia’s oil production reached 10.24 mbpd in June, which was up from the 10.19 mbpd tallied in May.

FocusEconomics Consensus Forecast panelists expect oil production to reach an average of 9.84 million barrel per day this year. In 2016, the panel of analysts sees crude output broadly stable at 9.83 barrels per day.

Author: Ricard Torné, Lead Economist

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SaudiArabia Commodity July 2015 0

Note: Price of the OPEC oil basket in USD per barrel.
Source: Organization of the Petroleum Exporting Countries (OPEC).

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