Following the recent default of Greece on the International Monetary Fund (IMF) payment and increased oil production in the United States and countries from OPEC (Organization of Petroleum Exporting Countries), oil was unable to sustain strong bearish pressure on Wednesday.
As widely expected, Greece formally ended unable to pay IMF its €1.6 billion, what is a default of developed economy after a long time. This had naturally consequencies of EUR/USD currency pair, which experienced trades in favour of the dollar, adding to the bearish pressure on oil futures.
Moreover, as Reuters survey showed, OPEC supply was seen to reach the highest level in three years of 31.6 million barrels a day during the month of June, while May saw only 31.3 million bpd. The leading exporting country was Iraq now, reaching a record level in June, while the entire group has increased its oil production by over 1.3 million bpd since November 2014. That month OPEC turned its focus on its market share, finding its more relevant as oil prices.
US crude oil production rose 9,000 bpd to actual 9.701 million bpd, reaching the highest level since May 1971, according to the official data for the Energy Information Administration.
Another worrisome factor remains in central Asia, where the Iran talks have not found a solution yet. Any possible positive outcome from Tehran’s nuclear talks could strengthen supply side of the oil market, adding Iran’s crude oil to already oversupplied markets. The deadline for negotiations has been postponed to July 7, when we can expect a final outcome.
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