There Are 300,000 Iraqi Barrels Signaling Oil Glut Will Deepen – Bloomberg.
Not only is OPEC refraining from cutting oil output to stem the five-month plunge in prices, it’s adding to the supply glut.
Just five days after the Organization of Petroleum Exporting Countries decided to maintain production levels, Iraq, the group’s second-biggest member, inked an export deal with the Kurds that may add about 300,000 barrels a day to world supplies.
In a global market that neighboring Kuwait estimates is facing a daily oversupply of 1.8 million barrels, the accord stands to deepen crude’s 38 percent plunge since late June. Or as Carsten Fritsch, a Frankfurt-based analyst at Commerzbank AG, put it: there’ll be “even more oil flooding the market that nobody needs.”
Benchmark Brent crude slumped immediately after the deal was signed yesterday inBaghdad, dropping 2.8 percent to $70.54 a barrel. The price, which slipped another 0.2 percent today, is down 9 percent since OPEC’s Nov. 27 decision and 17 percent over the past 30 days.
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