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(Reuters) - OPEC members will reduce the group's output to adhere to its 30 million barrels per day (bpd) output ceiling and the effects should be seen in July, OPEC Secretary-General Abdullah al-Badri told a news briefing on Friday.
The Organization of the Petroleum Exporting Countries agreed at a meeting in Vienna on Thursday to maintain the 30 million bpd production ceiling. Badri said that would entail curbing actual supplies by 1.6 million bpd.
"We overproduced by 1.6 (million barrels per day) now we decide to take out the 1.6 and stay with the 30 million," he said. "Everybody will respect that."
"Maybe this will start sometime in July. You need some time," he added.
OPEC did not issue individual member quotas as part of the 30 million bpd production agreement, which it adopted at its last meeting in December.
Graeme wrote:German Bank Won’t Finance Arctic Ocean Drilling, Saying The ‘Risks And Costs Are Simply Too High’
The bank’s new eight-point policy on offshore drilling lays out specific criteria for the projects and companies that are eligible for financing — excluding any exploration or production activities in areas where the average temperature for the warmest month is below 10°C (50° F).
Plantagenet wrote:When it comes to Arctic ocean oil drilling, its completely irrelevant what any bank in Germany says or does----.
World oil inventories have risen over the past two months, aided by increased output from Iraq and Libya, but spare production capacity remains tight, the U.S. government said on Tuesday.
Global fuels output exceeded consumption by an average of 1 million barrels per day in May and June, helping to push oil inventories higher and prices lower, the Energy Information Administration said in a report, obtained by Reuters ahead of its publication.
The EIA report is required every 60 days under the Iran sanctions law signed by President Barack Obama late last year that called for restricting Iran's ability to sell its crude oil on world markets.
The EIA estimated that world spare production capacity grew in the last two months to 2.4 million bpd, up from 2.1 million bpd in the previous two months.
The EIA warned, however, that spare world oil capacity was less than 3 percent of total world consumption, making it a factor as U.S. imposes sanctions and the European Union embargoes Iranian oil shipments from July 1.
"Spare capacity in May and June is still quite modest by historical standards, especially when measured as a percentage of global oil production and consumption," the EIA said.
Iraq has reclaimed its place as the second-largest oil producer in the Organization of Petroleum Exporting Countries, overtaking Iran for the first time in 24 years and shifting the balance of power in the group.
After years of conflict and poor security, Iraq has finally begun to rebuild its shattered oil industry. In July, it pumped just over three million barrels a day, an impressive 400,000 barrel-a-day increase since the end of 2011, according to OPEC data.
But the shift in rankings also is because Iran's output has declined. Western sanctions, aimed at pressuring Tehran over its nuclear program, have cut 700,000 barrels a day from the country's production since 2011, according to OPEC data.
Before the first of the sanctions were imposed in January, Iran was producing 3.5 million barrels a day of oil, a level Iraq doesn't expect to reach until next year.
The gap between the two countries is likely to widen further in the coming months as Iraq sees more rewards from contracts signed in 2009 and 2010 with large Western, Russian and Chinese oil companies to develop a dozen neglected oil fields in southern Iraq. These include some of the world's largest, like Rumaila and West Qurna.
The recovery in Iraq's oil output because of these deals was gradual at first, averaging 4.2% annual growth between 2006 and 2010. It kicked into high gear last year, as oil production expanded 12.5%.
This is good news for oil consumers. Extra supplies from Iraq helped global markets cope with the loss of Libyan exports during last year's civil war. It also helps offset the loss of Iranian exports this year.
But so far, Iraq has just been making up for many years of oil-industry neglect. It still has plenty of growth potential.
"Iraq sits on very bountiful oil reserves [estimated at 143 billion barrels], and for decades there was too little investment to develop these," said Samuel Ciszuk, an analyst at the U.K.-based consultancy KBC Energy Economics. "So the capacity to lift production even significantly above today's levels is there."
Saudi Arabia pumped crude at the highest level in more than three decades in June, overtaking Russia as the world’s largest oil producer during the month, according to the Joint Organization Data Initiative.
The desert kingdom’s output rose 3 percent to 10.1 million barrels a day in June from May as it exported the most in a month since November 2005, according to statistics the government submitted to OPEC and posted on JODI’s website today.
Russia pumped 9.9 million barrels a day of crude oil in the same month, according to the initiative known as JODI. The Russian data exclude natural-gas liquids, JODI said.
Saudi Arabia, the largest producer in the 12-member Organization of Petroleum Exporting Countries, put 272 million barrels of crude oil in storage inside the country in June, 2.2 percent less than in May, the data show. The world’s biggest oil exporter shipped 7.84 million barrels a day in June, an increase of 2.3 percent from a month earlier. The data for output and exports include condensates and exclude natural-gas liquids.
JODI calculated a different barrel-per-day figure for Russia using data in metric tons that the country submitted to the Asia-Pacific Economic Cooperation forum, and compared that with information from other sources, it said.
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