Theres no question that OPECs recent talk of a crude oil production cut is good news for oil investors. However, the latest report from the organization suggests that the global oil industry is still a long way from balanced.
A new OPEC report revealed some discouraging figures and projections, sending the United States Oil Fund LP (ETF) (NYSE:USO) down 1.3 percent in Wednesday morning trading.
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The USO is up more than 7.8 percent in the past month on reports that OPEC could soon agree to its first crude oil production cut since 2008. Last month, OPEC members announced a plan to cut crude production to between 32.5 million and 33.0 million bpd. However, the latest numbers from September revealed that OPEC upped its production by 220,000 bpd to 33.39 million bpd.
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OPEC's September production number is its highest monthly number since 2008.
However, perhaps the most discouraging numbers for oil investors are OPECs latest 2017 projections. The organization is now calling for a 200,000 bpd rise in non-OPEC production in 2017, up 40,000 bpd from its previous forecast. Russia is the primary non-OPEC production driver.
OPEC is now calling for 32.59 million bpd in OPEC crude oil in 2017, suggesting an average surplus of 800,000 bpd. Just a month ago, OPEC was calling for a 2017 surplus of only 760,000 bpd.
OPEC did not alter its 1.15 million bpd global demand growth projection for 2017.
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