OPEC output is actually increasing, putting downward pressure on oil prices, even while the organisation's members are in talks designed to reduce output in future, with the intention of pushing prices up.I thought the "summer power burn season" had passed.
Not for the first time, OPEC's members are engaged in a high stakes game of chicken.
Crude production rose by 240,000 barrels per day (bopd) to a record 33.64 million bpd in October.
Output is now between 640,000 bpd and 1.14 million bpd above the production ceiling of 32.5 million to 33.0 bpd ministers agreed at the end of September, 2016.
Member countries are all trying to establish the highest possible baseline for their own allocations when it comes to sharing out the production target.
In addition, Saudi Arabia is trying to back up its demand for credible production restraint from other countries by signalling that if they do not agree it is ready to flood the market and push prices lower.
Saudi Arabia has maintained production close to the record set in July even though the summer power burn season has passed.
And when they finally release their allocation shares, they will cheat anyway.
Meanwhile, from Amir Bornaee over at Genscape: Middle East and West Africa crude oil exports hit a record high. Data points:
- total, Middle Easter and West African data exports
- record high of 23.43 million bopd
- translates to 1.47 million bopd higher than the previous month
- Middle East
- Saudi Arabia: up by 550,000 bopd
- Iran: up by 260,000 bopd
- Iraq: flat, at 3.31 million bopd
- West Africa
- Nigeria: an increase of 180,000 bopd
- Angola: an increase of 25,000 bopd due to higher demand from China
- the extra supply was absorbed by European and Indian refiners
- French refiners have been increasing purchases from Iran since July