OPEC jumps to its highest supply since last year’s October

In the month of March, OPEC oil supply has jumped to its highest since October as Iraq’s exports rebounded after bad weather. On the other hand, Saudi also pumped, close to its record production level.
Due to the increase in OPEC’s supply, global crude market is likely to observe excess market supply. However, higher market demand is also noticeable at the present scenario.
According to surveys, OPEC supply has risen in March to 30.63 million barrels per day (bpd) from a revised 30.07 million bpd in February.
Carsten Fritsch, an analyst at Commerzbank in Frankfurt, stated, “Demand might be a bit stronger than expected at the beginning of the year, but I don’t think it is strong enough to absorb the entire oversupply.
“There’s still oversupply in the market, which is reflected in the inventory builds.”
Due involuntary outages, oil supply has seen the growth recently. Iraqi exports improved as weather condition improved, while Libya managed to nudge production higher despite unrest. If the total remains unrevised at 30.63 million bpd, March’s supply would be OPEC’s highest since 30.64 million bpd in October 2014.
In this month of June, this year, OPEC’s next meeting is scheduled. According to sources, it has been informed that OPEC is in no mood to change its policy.
In the month of March, the biggest oil supply came from Iraq. The southern oilfields of the country were not reportedly functioning properly due to bad weather in past few weeks. As the normal weather condition restored, supply from southern oilfields increases.
Iraq’s exports have come close to December’s record high of 2.94 million bpd, depending on whether tankers at the southern ports on earlier on Tuesday actually depart in March. Iraq was hoping to reach 3 million bpd of exports this month.
Saudi Arabia has increased output to within a whisker of 10 million bpd on average in March, sources in the survey said, due to higher demand from export customers and an increased local requirement in new oil refineries.
According to an oil consultant, “The Saudis say they are responding to higher demand and I tend to believe that, looking at the strong refining margins in Singapore.”
Saudi Oil Minister Ali Al-Naimi said on March 22 output was “around” 10 million bpd. The highest known Saudi output is 10.05 million bpd in 2013, according to figures from the US Energy Information Administration.
Of countries with lower output in March, the biggest decline was in Angola, partly due to a force majeure on exports on BP’s Saturno crude stream. OPEC’s other West African producer Nigeria also exported fewer cargoes in March.