(MENAFN- The Peninsula) Opec oil output reached the highest monthly level in recent history in July, a Reuters survey found yesterday, as Saudi Arabia and other key members show no sign of wavering in their focus on defending market share instead of prices.
The latest boost from the Organization of the Petroleum Exporting Countries adds to excess supply in the market without the significant rise in demand Opec hopes will happen in the second half of the year and in 2016.
Opec supply has risen in July to 32.01 million barrels per day (bpd) from a revised 31.87 million bpd in June, according to the survey, based on shipping data and information from sources at oil companies, Opec and consultants.
The group has upped production by more than 1.7 million bpd since it decided in November 2014 to defend market share against rising output from rival producers. This month's deal between world powers and Iran over Tehran's nuclear work could further add to supplies in 2016.
Some analysts say there are signs Opec's efforts to discourage growth in more expensive-to-develop rival supply sources are bearing fruit.
Opec shows no sign of changing course despite the price drop. Secretary-General Abdullah Al Badri, on a visit to Moscow on Thursday, dampened the prospect of output cuts and said the market could absorb extra oil from Iran.
If the total remains unrevised, July's supply would be Opec's highest since 2008 - when oil prices hit a record $147 a barrel before collapsing, and production was above 32 million bpd until Indonesia left the group at the end of the year.
July's output from Opec's current 12 members is their highest since Reuters survey records began in 1997. The biggest increase in July has come from Iraq, one of the main drivers of the rise in Opec output this year.
Exports from southern Iraq have climbed above 3 million bpd and shipments from Iraq's north via Ceyhan in Turkey remain close to June's levels despite tensions between Baghdad and the Kurdistan Regional Government over budget payments.
Those tensions do not appear to have significantly curbed actual export volumes, although a sabotage attack on the pipeline carrying crude to Turkey from Iraq earlier this week halted pumping, highlighting the potential for disruption.
Top exporter Saudi Arabia has kept output steady or higher than in June, which was a record, sources in the survey said, as Riyadh meets higher demand internationally and from domestic power plants and refineries.
Iran, eager to reclaim its traditional spot as Opec's second-largest producer if and when sanctions are lifted, increased supply slightly in July with a sale of crude from floating storage.
The only significant decline in output occurred in Libya, where supply remained disrupted by unrest and negotiations to reopen closed oil facilities had yet to succeed.
Oil prices fell yesterday, with US crude looking set to post the largest monthly drop since the 2008 financial crisis after signs that top producers in the Middle East were continuing to pump at record levels despite a growing global gut.
A higher US oil rig count for a second week in a row added to the market's downside. Uncertainty ahead of key US oil production and rig count data due later in the day also weighed on prices, despite a weaker dollar, which would normally support commodities.
Diverting some attention from crude., heavy hedging activity in gasoline and diesel futures ahead of front-month contract expiration dominated play on the petroleum complex.
Futures of global benchmark Brent and US crude oil were down more than 2 percent on the day. Brent was down 5 percent on the week, declining for a fifth week in a row.
Through July, US crude was down 20 percent, its largest monthly decline since October 2008, when oil had an epic collapse at the outbreak of the financial crisis. Brent fell 18 percent on the month.
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