The International Energy Agency has announced that the Global supply of oil rose in July despite increased sanctions on Russia’s domestic oil and gas industry as well as a multitude of violent incidents raging on in the Middle East.
Overall, supplies in the month of July rose by 230,000 barrels per day to 93 million barrels per day. This increase is largely due to strengthened output from the Organization of Petroleum Exporting Countries. Output from producers that are not a part of OPEC actually fell in July.
Oil prices should remain stable for energy consumers in the United States. The U.S. has seen a strong run for domestic energy production, and OPEC is now producing almost a third of the world’s oil supply at 30.44 million barrels per day.
“A boost from Saudi Arabia to 10 million barrels per day and a tentative recovery in Libyan output more than made up for declines in Iraq, Iran, and Nigeria,” said the International Energy Agency in its monthly “Oil Market Report.”
Worldwide oil consumption is expected to slow over the course of the rest of the year, but it should pick up in 2015.
The new report from the IEA spells good news for everyday Americans and domestic businesses that rely on oil usage, as prices will remain steady for the remainder of the year.
The report also shows that the new sanctions being placed on Russian oil production, as well as the ongoing conflicts in the Middle East, are not having globalized impacts on the worldwide oil market.
This allows countries such as the United States and its European Allies the ability to keep up the pressure on Russia without having to fear of a spike in the price of oil.
OPEC’s ability to produce massive amounts of oil for worldwide consumption has allowed it to have a bit of a stranglehold on the market. OPEC often holds back supply or floods the market with excess oil in order to manipulate the price. The fact that it produces over 30 million barrels a day is what gives OPEC such power over consumers all across the world.
However, OPEC’s increase in production also helps to offset shortfalls in non-OPEC nations, meaning that the market as a whole can be a lot more stable thanks to the organization’s ability to act as a shock absorber when production is down.