Iraq Exports Help to Put Oil Production Levels at New Peak

OPEC oil production rose 290,000 barrels per day in July – the highest level since December 1979.

Total July OPEC output came to 30.24 million barrels per day (bpd), according to the survey of consultants, shippers, industry and OPEC sources. This compares to a June output of 29.95 million bpd.

The boost was attributed to a rise in exports from Iraq and a restored output at oilfields in the United Arab Emirates.

Record crude oil prices have encouraged the Organisation of the Petroleum Exporting Countries to push output to near 26-year highs. But opening the taps has had little effect on prices.

Oil was holding steady just below $61 yesterday after sliding from record highs on a surprise build in U.S. crude stockpiles, boosted by hefty imports.

US light sweet crude for September edged up three cents to $60.89 in Asian trade, after briefly touching a fresh high of $62.50 a barrel on Wednesday.

London Brent crude was flat at $59.65 a barrel after falling from record-peaks at $61.26.

‘OPEC is producing as much crude oil as anybody wants,’ said Geoff Pyne, energy consultant for Standard Bank. ‘Refiners have no shortage of the grades they need. But it’s out of OPEC’s hands to bring the price down.

Prices have rallied to records this year on concern that a stretched global refining system would struggle to meet rapidly growing fuel demand coupled with forecasts for more severe Atlantic storm activity.

US refinery outages that could strain thinning gasoline stocks limited the downside for prices, keeping oil 40 per cent higher than at the start of the year. Iraq saw the largest increase in output in July at 160,000 bpd.

The Iraqi export rise was unlikely to be sustained, consultants said, as there have been few exports through the pipeline since. The line has been idled due to sabotage attacks since the US-led invasion in 2003.

Output from OPEC’s ten members excluding Iraq, which is exempt from quotas, was at 28.21 million bpd in July, up from revised output of 29.09 million bpd in June