OPEC produced a total of 26.63 million bpd in May, an increase of 145,000 bpd compared to April, according to the Reuters survey, which tracks supply to the market and is based on information provided by industry sources and shipping data.

Iraq, OPEC’s second-biggest producer behind Saudi Arabia, has been consistently pumping crude above its OPEC+ quota, and has also consistently promised it would compensate for said overproduction.

Last month, Iraq and non-OPEC producer Kazakhstan presented to OPEC plans that would ensure full compensation of overproduced volumes by the end of the year. Additionally, any excess production in April 2024 will be accommodated within the respective compensation frameworks throughout the remainder of the year.

Despite the pledges made in early May, Iraq raised its production by about 50,000 bpd last month, per the Reuters survey.

Nigeria also boosted its output by 50,000 bpd, as it looks to raise production after years of underperforming in the OPEC+ deal, which led to the OPEC+ group cutting its quota at the end of last year.

Overall, the nine OPEC members bound by the OPEC+ pact produced around 250,000 bpd more than their combined implied target in the deal, according to the Reuters survey. Iraq accounted for a large part of OPEC’s overproduction versus the implied quota.

The observed increase in OPEC’s oil production isn’t contributing to any bullish sentiment at all, as one part of the market was largely left disappointed by the OPEC group’s decisions this weekend, while the other part of market participants are fretting about slowing economies that could hit global oil demand.

Oilprice.com