The Organization of the Petroleum Exporting Countries said the group’s production rose to its highest level in more than three years, despite global oversupply that has helped send prices tumbling.
In its monthly oil market report, the 12-nation cartel of some of the world’s biggest oil producers said its members pumped 31.51 million barrels a day in July—its highest level since May 2012, representing an increase of 101,000 barrels a day, compared with the previous month. That is 1.5 million barrels a day above the group’s stated output ceiling of 30 million barrels a day, which OPEC endorsed at its last gathering in June in Vienna.
In the past, OPEC has moved to bolster prices by restraining output. But in the current downward price spiral, the group has instead moved to protect market share, instead of prices. The move comes as a flood of new sources of oil-including CLU5, -3.31% U.S. shale output and new OPEC production LCOU5, -2.50% —has hit the global oil market at a time when demand forecasts remain cloudy. The result has been a market oversupply, and sharply falling prices.