OPEC Oil Output Surge Boosts Surplus, Despite Higher Demand
LONDON, April 16 (Reuters) - OPEC said its oil output surged in March, adding to a global glut, despite more evidence that the producer group's strategy of letting prices fall to hurt other producers is taking effect.
OPEC's report may reinforce the perception that major producers are staking out market share ahead of a potential rise in Iranian exports following its framework accord with world powers over its nuclear programme.
Thanks to lower output from the United States and other rival producers due to the oil price drop, the Organization of the Petroleum Exporting Countries said demand for its oil this year would be 80,000 barrels per day (bpd) higher than previously thought.
Its monthly oil market report also confirmed industry estimates of a surge in OPEC production in March, which jumped by 810,000 bpd - ten times the increase in 2015 demand for OPEC crude - led by record output in Saudi Arabia and higher Iraqi exports.
"The strategy of OPEC to put pressure on the high-cost producers is working, but the individual members seem to have moved off of that focus and are instead producing as much as they can," said Jamie Webster, analyst at IHS in Washington and an OPEC expert.
"OPEC's strong production growth points out that they still have the capacity and willingness to swing up - unfortunately the global market doesn't require it at this time."
Oil fell more than $1 to $62 a barrel after the report was released.
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