OPEC Production Likely To Remain Low
Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2001.
Notes:
With a background of some weakening demand from weakening economies (being pushed lower by high crude oil prices), OPEC has shown not only a a reluctance to increase production any time soon, but has actually decreased production.
OPEC has attempted to reduce production by 3.5 million barrels per day so far this year. The last of these cuts is not to occur until September, which will affect consuming countries the most over the upcoming winter. Tightness in both European (Brent price) and Asian (Dubai price) markets are reflected in the recent strength seen in the marker crude oil for these regions.
But with the effect of the 2nd OPEC production cuts just taking effect and the effect of the 3rd production cut yet to come, U.S. crude oil stocks are likely to be drawn down (or certainly not built at normal rates) the rest of this summer and the U.S. crude market appears to be tightening up.