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Iran’s crude oil price decreases by 18%-OPEC

Business Materials 14 September 2015 18:00 (UTC +04:00)

Baku, Azerbaijan, Sept. 14

By Umid Niayesh - Trend:

Iran's Heavy crude oil price stood at $46.25/b in August, indicating a fall by $8.61 or 18.6 percent compared to the preceding month, the Organization of Petroleum Exporting Countries (OPEC) said in its latest monthly report released Sept. 14.

The OPEC Reference Basket (ORB) plummeted for the third consecutive month, ending August at a level near that seen earlier in the year and during the financial crisis six years ago. It lost over a hefty 15 percent m-o-m and was below the $50/b mark for the first time since January.

On a monthly basis, the ORB fell a hefty $8.73 or 16.1 percent to stand at $45.46/b, on average in August. Meanwhile, compared with a year ago, the ORB value continued to lag at $53.81/b versus the $104.78/b year-to-date value in 2014.

OPEC's oil basket is currently made up of the Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

The sharp fall in the Basket value took place amid numerous fundamental and non-fundamental factors, with ongoing oversupply in the oil market and a greater-than expected slowdown in the Chinese economy having the largest effect.

Iran increased crude oil production (excluding condensates) by 4,000 barrels per day in August, compared with the previous month. The country's oil output reached 2.857 million barrels per day (mbpd).

The country ranked fourth among the OPEC countries after Saudi Arabia , Iraq and the UAE based on secondary sources.

Iran stood at third place, in an OPEC report on oil production in 2012 after Saudi Arabia and Iraq . However, in 2013 it fell to the fifth spot.

The Islamic Republic's oil production is 3.18 mbpd for August according to an OPEC report based on direct communication, indicating a 323,000 barrel difference between OPEC's estimates and Iran 's data.

The report also says that OPEC members' total crude oil output has increased by about 13,200 bpd in August compared to July, reaching 31.544 mbpd.

World oil demand growth for 2015 stands at 1.46 mbpd, leading to total global consumption of 92.79 mb/d. In 2016, world oil demand is forecast to increase by 1.29 mbpd and hit 94.08 mbpd.

The demand for OPEC crude stood at 29.3 mb/d in 2015, which is 0.4 mb/d higher than the previous year's level. In 2016, required OPEC crude is projected at 30.3 mbpd, representing an increase of one mbpd from estimated 2015 level.

Follow the author on Twitter: @UmidNiayesh

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