Abu Dhabi: The Organisation of the Petroleum Exporting Countries (Opec) is expected to continue producing surplus oil going into next year even as production increased 14 per cent in July.

Output from 16-members of Opec, which contributed to 34.8 per cent of the total output last month, rose by 46,400 barrels per day to 33.106 million per day in July. Global supply, which includes supplies from non-Opec members rose by 24,000 barrels per day on month to 95.14 million of barrels per day in July. The Opec supplies are expected to register a surplus of 100,000 barrels per day in 2017, compared to a deficit that it saw last month, Opec said in its monthly report released on Wednesday.

“The overall indications in the supply side by the end of second quarter of 2016 are showing that the short-term outlook for non-Opec supply in 2016 is being revised up due to the recovery in Canadian oil production following the vast wildfire in Alberta and rising rig counts in the US for four consecutive weeks, resulting in higher-than-expected output,” Opec added.

Members of Opec have been pumping in record oil to control market share. Saudi Arabia, the world’s largest exporter of crude oil produced 10.673 million barrels per day of oil in July, up from 10.55 million barrels in June. The number is also the highest compared to previous months.

Edward Bell, a commodity analyst at Emirates NBD, said Saudi Arabia is having record output due to increased demand in the summer months.

Other producers

Other countries like the UAE are also producing at record levels to control market share. In July, the oil production of the UAE was about 3.18 million barrels per day, up from 3.16 million barrels per day in June. Iran, Angola, Nigeria and Iraq have also upped their production, the latest data from Opec monthly report shows.

Due to oversupply in the market, oil prices have been on a downward trend. From more than $110 (Dh403.70) per barrel in 2015, oil prices decreased to less than $50 per barrel in recent times. Brent, the global benchmark was trading at slightly above $45 per barrel on Wednesday evening.

Unchanged demand

Opec threw light on the world oil demand and other aspects of production including a cut in capital expenditure and non-Opec supply in the market. According to the report, in 2017, world oil demand is projected to grow by 1.15 million barrels per day from 2016 levels, and total oil consumption will hit a new record of 95.41 million barrels per day. This demand remains unchanged from last month’s projections by the group.

In 2015, the top ten major oil and gas companies, including two main service companies, cut spending by 15 per cent year-on-year compared to a decline of 6 per cent in 2014 from a year earlier. For 2016, a further cut of 20 per cent, with a total spending of $135 billion, is anticipated.