OPEC nominally still has big oil-production cuts in place, but cartel members such as Iran and Angloa—both suffering from the recession—are looking for revenue in extra barrels of crude. Compliance among OPEC’s 11 quota-bound members was down to 68% in June, after reaching 80% earlier this year, according to the International Energy Agency.
That compliance rate is par for the course, historically. But it means that since April, OPEC increased production by about 330,000 barrels a day. And additional oil has hit the market from other sources, the IEA says. Since demand is still fairly week and inventories are still bulging, that extra crude is simply feeding oil bears.
Is that a good idea to pursue when there's a already a global glut?