Oil price drops to $40 as glut hits market – Today.ng

Global oil prices fell below $40 a barrel at the beginning of the week as oil output from OPEC countries showed outputs for the 13-member bloc at record highs when compared to figures in recent history.

The overall increase in global crude output has dragged oil prices down 20 per cent since they broke above $50 in June.

Reuters survey found that Iraq increased oil output in July, as the national army made gains against the Islamic State’s (ISIS) oil production and supply network.

The former gulf country’s oil officials confirmed on Monday an increase in crude production from 3.175 million barrels in June to 3.2 million barrels in July.

Nigeria also upped outputs despite militant efforts. To meet an uptick in seasonal demand for oil, Saudi Arabia – OPEC’s de facto leader and top exporter – kept production levels close to record highs in order to limit Iran while it attempts to regain lost market share.

Saudi Aramco had also cut its price per barrel to Asia by sizable margins over the weekend.

The Iranian oil minister confirmed the oil glut in a statement to Iranian state television on Monday, but insisted that the balance between supply and demand would be restored in due time.

American oil drillers added 44 oil rigs last month, the highest amount in any month since April 2014 – according to Baker Hughes latest rig count.