OPEC’s market share of the world oil market has
fallen to 30 percent, the lowest percentage in years, due to supply constraints
and involuntary losses in Iran and Venezuela, with a slight hesitation by the
producer about the production cut strategy.
OPEC’s dilemma
Oil prices fell from the highest level in April
2019 at $75 per barrel to $60 despite supply cuts by OPEC members, amid pressure
of global recession and concerns about the trade war escalation between the U.S.
and the China.
Crude oil from OPEC organization reached 30
percent of the world’s oil supply in July for the current year, down from more
than 34 percent since 2009, and a peak of 35 percent seven years ago,
according to the data published by the OPEC organization.
Low prices, if continued, and the erosion of
their market share may raise the question of whether continued supply
restrictions are in the best interest of producers or not, as OPEC and its
allies have an agreement to limit oil supply until March of the following
year.
OPEC, Russia and other producers
narrowed the supply for most of the period since January 1, 2017. This
alliance, which is known as OPEC+, renewed their agreement last month till
March next year.
Although the prices have been boosted by this
agreement, but OPEC’s market share was sharply affected to keep falling over last
two years.
Global supply increased by 2.7 percent to 98.7
million barrels per day, while OPEC crude production fell 8.4 percent to 29.6
million barrels per day.
Oil prices
As of 10:35 GMT, Brent crude futures rose 0.61
percent at $60.66 a barrel for the delivery of October, while West Texas
futures was 0.61 percent up at $56.02 a barrel.
U.S. Energy Information Administration data released on Wednesday showed
that U.S. crude inventories fell for the first time in three weeks in the week
ended August 16, down 2.7 million barrels to 437.8 million barrels.