O(lym)PEC Record

12 Aug 2016: This club of oil producers is still a force to be reckoned with The 29th Olympic Games in Brazil are in full swing and records are falling daily. Not to be left behind, OPEC announced in their latest Monthly Oil Market Report record crude oil output for July 2016. Production of the members of the Organization of the Petroleum Exporting Countries reached 33.106 million barrels per day (mb/d). Within OPEC, Middle Eastern countries continue to dominate the competition: Saudi Arabia took the gold with 10.477 mb/d. At a respectable distance, Iraq claimed silver with 4.320 mb/d, while a resurgent Iran rallied to take the bronze with 3.629 mb/d. As in any competition, where there are winners, there are also losers. For different reasons, Venezuela, Nigeria and Libya continue to struggle. These countries produce well below their capacity and it is uncertain if and when they can turn their fortunes around. For the tanker market, in particular for VLCCs, increasing Middle East OPEC production is typically a good sign. That does not appear to be the case at this particular moment, since the tanker market is mired in a slump with rates hitting multi-year lows. Is this an (temporary) aberration or has the traditional link between Middle East OPEC production and VLCC rates been broken? Download here
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