HardAssetsInvestor

Written by Sumit Roy  |

May 02, 2012

Crude Oil Report: Iranian Output Falls To 20-Yr Low, But OPEC Output Surges Thanks To Iraq, Libya & Saudi Arabia

Details

Because of economic sanctions, Iran’s crude production dropped to a 20-year low in April, but Iraq saw its production spike to a 12-year high.

The Department of Energy reported this morning that in the week ending April 27, U.S. crude oil inventories increased by 2.8 million barrels, gasoline inventories decreased by 2 million barrels, distillate inventories decreased by 1.9 million barrels and total petroleum inventories increased by 1.9 million barrels.

The latest figures had little impact on crude oil prices, which were already lower amid concerns about the U.S. labor market, following disappointing data from payroll processor ADP.

On Tuesday, WTI hit a one-month high near $107. The benchmark has outperformed Brent in recent sessions, as traders look forward to the reversal of the Seaway pipeline later this month.

WTI

As for Brent, it remains range-bound in an especially narrow band between $117 and $120.

BRENT

In our view, prices may be poised to decline further following this consolidation period. While last week we wrote about the surge in U.S. crude oil production, this week we learned that output elsewhere has been rapidly rising as well.

Specifically, output in fellow OPEC members has helped offset steep declines in Iranian oil production. That country saw its output fall to less than 3.3 mmbbl/d, a 20-year low, according to the latest Bloomberg survey.

IRAN OIL PRODUCTION