Oil supply glut in Middle East persists

Oil production continue to remain on a higher side in OPEC. Breakdown in cooperation led to failure of strict quota system and monitoring of such.

• In March OPEC production increased by 560,000 barrels per day to 30.63 million barrels per day.
  
  
• Thus OPEC oil supply has jumped in March to its highest since October led by Iraq as exports rebounded after bad weather. Saudi Arabia continue to pump at close to record rates. Iraq is pumping close to 3 million barrels per day.
  
  
• Libya, despite unrest was able to boost production higher according to a survey by Reuters.
  
  
 
• Saudi Arabia has vowed to keep pumping at high rates to reign in market share and drive away costlier produces from US and Africa.

OPEC will hold its general meeting in June, however talks suggest there will hardly be any changes to current policy and production rates.

The chart attached explains crude production levels since 2012.

• Current production is still lower than high made during 2012, above 31.5 million barrels, however that is moreover due to Iran which saw production and export drop by 50% over sanctions.

What to watch out for?

• Resolutions if any, on nuclear negotiations. between Iran and world powers.
• Middle East tensions, if that escalates
• US production, continue to grow or falters?
• US export ban, might be removed partially.

Brent is trading at $55.09/barrel, flat today.