OPEC over-supplies dampen rise in oil prices

Supply of crude from the Organisation of Petroleum Exporting Countries (OPEC) rose to a three-year high of 31.60 million barrels per day (bpd) in June, analysts said, yesterday.

Analysts at PVM Oil Associates, London, said outside the United States supply, oil supply from OPEC alone had risen by 300,000bdp up from 31.30 million bpd in May.

“We are going into the second half of this year with a heavily oversupplied fundamental picture, which makes any bullish price forecast hard to accept,” oil market analysts wrote.

Other analysts echoed assessments of a fall in prices in the second half of the year.

“When refineries go into fall (autumn) maintenance we expect to see some significant pressure on crude oil and on that basis we expect to see the crude time-spreads under pressure by the end of the third quarter,” said Olivier Jakob, analyst at Switzerland- based Petromatrix.

But oil prices edged higher on Thursday as the US dollar slipped following weaker-than-expected US non-farm payrolls data.

Poll indications that Greek citizens were expected to back a cash-for- reforms deal in a referen- dum on Sunday added to the bullish momentum, traders said.

Traders were also keep- ing a close eye on nuclear talks between Western powers and Iran, looking for any sign of a deal to lift sanctions on the oil-rich nation.

Brent futures were trading 60 cents higher at $62.61 per barrel while front month US crude futures were up 18 cents at $57.14 per barrel. Oil prices had slumped between 2.5 and 4 percent on Wednesday after a surprise weekly rise in US crude inventories, the first build since April.