OPEC members are pumping oil at the highest rate in nine months despite softer demand for petroleum exports, according to a range of industry sources.
Traders said an oversupply in the market is keeping oil prices at around $14 a barrel, compared with the cartel's $18 average target. The glut is so big that not even renewed tension in the Persian Gulf has sent prices appreciably higher.A Reuter survey this week showed production in June by the Organization of Petroleum Exporting Countries at around 18.5 million barrels a day, up from 18.3 million in May. The figure was the highest since last October, when the cartel pumped 18.6 million.
The survey was based on figures from industry executives, government officials and shipping sources in the Middle East, Europe, Asia and Latin America. It defined output as exports plus domestic sales, rather than how much oil was taken out of the ground.
Market analysts vary in guessing how much OPEC oil the world is actually going to need in coming months, with some seeing the July-September requirement down at 18 million barrels a day. Others look for 18.4 million or slightly more.
But there is general agreement that OPEC output exceeds demand since refiners built up substantial stocks during April, May and June.
The sources said the gain in OPEC's June production mainly reflected higher output by the United Arab Emirates. They estimate the UAE exceeded its cartel quota by 400,000 barrels daily.
UAE output is likely to rise again in July. The gulf state has said it regards its OPEC production quota as unfair and has told oil companies they may pump up to 1.1 million barrels a day from Abu Dhabi -- one of the emirates -- in July. The UAE quota is 948,000 barrels.
Iraqi production was estimated at 2.6 million barrels daily in June. Iraq refuses to accept the cartel's output restraints because it was not awarded a quota as big as that of its foe Iran.
Excluding Iraq, the cartel's ceiling for its overall output is set at 15.05 million barrels daily. Production by the 12 members who have been assigned quotas was in excess of this by about 300,000 barrels in June.
The sources estimated Iran's output slipped and was below its quota. Saudi Arabia also produced just under its quota.