OPEC nations supplying 40 percent of the world’s oil will increasingly test the price at which North America’s surging crude output is profitable by maintaining production as demand slumps, the International Energy Agency said.
The Organization of Petroleum Exporting Countries boosted output by the most in 13 months in September, even as prices plunged into a bear market and demand growth weakens to a five-year low, the Paris-based adviser to governments said in a report today. Both Saudi Arabia and Kuwait, the largest and third-largest members of OPEC, have indicated the price slump doesn’t warrant immediate production cuts, the IEA said.
The U.S. and Canada between them pumped the most crude since at least 1965 last year, according to data from BP Plc. OPEC members will test if that output can be sustained at lower prices, Antoine Halff, head of the IEA’s oil industry and markets division, said by phone from Paris today. For most of the past decade, OPEC would have responded to surpluses by cutting output, Halff said.
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