The OPEC oil basket traded at an average of $109.3 per barrel in July, down 7.3% from the previous month. Meanwhile, the price was 28.0% higher YTD and 48.6% higher than the same day last year.
Crude oil prices fell in July amid growing fears of a global recession amid rising inflation and interest rates. The US economy contracted in the second quarter of the second quarter, while China’s manufacturing PMI fell into contraction territory in July due to Covid-19 outbreaks and slowing external demand.
In terms of OPEC production, aggregate crude oil production among members rose to 28.7 million bpd in June (the latest month of available OPEC data) from 28.5 million bpd in May. This mainly reflected higher output in Saudi Arabia. The fall in production in Libya dragged out the press.
In the coming months, oil production in Saudi Arabia will continue to grow. However, it is unclear whether the August target set at the latest OPEC+ meeting of 11.0 million barrels per day will be met. Riyadh claims it has a production capacity of 12.0 million barrels per day, but the actual figure could be lower. Saudi Arabia has been short of its OPEC+ quota in recent months, and OPEC data shows that oil drilling remains well below pre-pandemic levels.
FocusEconomics Consensus Forecast experts expect Saudi oil production to average 10.60 million barrels per day in 2022. In 2023, our team of analysts forecast an increase in crude oil production to 10.99 million barrels per day.