x Abu Dhabi, UAESunday 23 July 2017

Opec output down as crude gains

Opec oil output fell last month, one in which the price of crude rose steadily on geopolitical concerns and steady demand.

Opec oil output fell last month, one in which the price of crude rose steadily on geopolitical concerns and steady demand.

The 12 members of the organisation pumped a total average of 31.1 million barrels per day (bpd) last month, a decrease of 157,000 bpd.

Iran, saddled with hefty sanctions, led the decline but Saudi Arabia, Libya and Angola also reduced output.The cutback was partially offset by Iraq, which passed the 3 million bpd mark for the first time in many years.

Crude prices have risen steadily over the past three months with Brent yesterday trading at US$112 a barrel.

While Opec produced in excess of market need, strategic stockpiling by China in particular kept prices from falling.

The group pumped an average 31.9 million bpd in the second quarter compared with projected demand for its crude of 29.8 million bpd, data from the International Energy Agency showed.

Opec last overproduced to this extent in 1998.

Prices were further buoyed by geo political tensions underpinned by the unrest in Syria .

"It's still the Arab Spring at play, you've essentially had this geopolitical situation since Tunisia," said Alexander Pögl, an analyst at JBC Energy.

But with the pace of Chinese inventory building slowing, some experts predictcrude prices could slide back below $100 a barrel. The anticipated stagnation in demand would support this view.

Faltering demand is likely to be countered by a further decline in global output, however, noted the consultancy KBC.

fneuhof@thenational.ae

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