Oil at 6-year low, but OPEC keeps pumping more

UBS did, however, caution investors to keep an eye on non-OPEC producers as the oil price recovers. That’s the lowest ANS price since March. The result has been a market oversupply, and sharply falling prices.

West Texas Intermediate for September delivery fell as much as 50 cents to $44.46 a barrel on the New York Mercantile Exchange and was at $44.70 at 2:10 p.m. Sydney time.

Alaska North Slope Crude prices are barely higher, sinking to $49.45 a barrel as of Friday, according to the Alaska Tax Division.

Prices had rebounded Monday from multi-month low points. The cartel produced 31.5 million barrels a day, more than 1.5 million barrels above the ceiling it agreed to just a month earlier.

Iran increased output by 32,300 barrels a day in July to 2.86 million a day, the highest since June 2012, according to data OPEC compiles from “secondary sources” such as media agencies and global institutions.

Oil markets have also been shaken by China’s reduced economic growth and collapsing stock market. “With China now accounting for more than a third of global GDP growth, it is natural to worry about spillovers to other economies”.

“U.S. onshore production from unconventional sources is now expected to decline marginally in the second half of 2015 through year-end, while U.S. offshore production is expected to grow due to project start-ups”, OPEC said.

But even with worldwide oil consumption eclipsing all previous records by reaching 92 million barrels per day, production by the largely Mideast OPEC nations, led by Iran, Iraq and Saudi Arabia, America’s “fracking potential” has overwhelmed the demand/supply equation.

OPEC boosted forecasts for supplies from outside the group in 2015 by 90,000 barrels a day, while trimming them for next year by 40,000 a day.

Saudi Arabia told OPEC it put out less oil in July, with production shrinking by 202,700 barrels a day to 10.36 million barrels a day.

Product markets in the Atlantic Basin continued to see support from strong gasoline demand in the US, pushing crack spreads to two-year highs, while spreads in Asia narrowed on the back of lower seasonal demand and increasing supply pressure toward the end of maintenance season.