🛢️ This Week in Fuel & Oil – What NW Iowa Farmers Need to Know
🌍 OPEC+ to Increase Oil Production Again in July
OPEC+ (the alliance of major oil-producing countries) just announced they’ll increase oil production by 411,000 barrels per day in July—the third straight month of big supply boosts.
Why are they doing this?
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They’re trying to regain market share after cutting back heavily during the pandemic.
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Countries like Iraq and Kazakhstan have gone over their previous limits, and this move also sends a message to stay in line.
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Even though more oil might lower prices, top producers like Saudi Arabia and Russia are choosing to sell more volume instead of focusing on price.
The group met online Saturday to weigh different options, but in the end, they stuck with their plan to slowly ramp production back up.
🇨🇳 Oil Demand in Asia Slows Down
You’d think lower oil prices would lead to more demand, but in Asia—especially China—that’s not happening right now.
Here’s what’s going on:
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China’s oil imports dropped in May to 9.43 million barrels per day, down from over 10.4 million in March and April.
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China had already stocked up on cheap Russian and Iranian oil, so they’re not buying more at the moment.
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Across Asia, oil imports are down by about 320,000 barrels per day compared to the same time last year.
The takeaway? Weaker economic growth and already-full storage tanks are putting a lid on demand, even as prices have dipped.
🛠️ U.S. Rig Count Continues to Fall
For the fifth week in a row, U.S. energy companies have cut the number of oil and gas drilling rigs. The total count is now 563 rigs, the lowest since late 2021.
What’s driving the slowdown?
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Energy companies are spending less due to lower oil and gas prices.
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The Permian Basin, America’s biggest oil field, hit a multi-year low in drilling activity.
Despite the dip in rigs, the Energy Department still expects record-high U.S. oil and gas production in 2025, thanks to more efficient drilling and hopes that gas prices will bounce back.
Big picture: Companies are more focused on returning profits to shareholders than pumping out more oil—at least for now.
📈 Market Overview: Oil Prices Rise After OPEC+ News
Oil prices climbed nearly 4% on Monday morning, thanks to OPEC+ sticking with their expected July increase of 411,000 barrels per day—no surprises, and no big supply shocks.
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Traders were worried OPEC+ might flood the market—but this steady move helped ease concerns.
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Many experts now think OPEC+ will continue these monthly increases through October.
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Even with more oil coming in, strong summer demand and tight supplies in certain markets are helping keep prices stable.
📊 OPEC Production Update – Steady Climb Month After Month
This July increase is part of OPEC+’s ongoing plan to slowly unwind the massive production cuts they made during COVID.
Here’s what we’re seeing:
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July marks the third month in a row of big production increases—each one over 400,000 barrels per day.
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That adds up to 1.37 million barrels per day since May.
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Their goal is to return 2.2 million barrels/day to the market, so they’re about 62% of the way there.
Some member countries (like Algeria) are a bit hesitant to keep increasing, but for now, the group is pressing forward, betting that demand will stay strong enough to absorb the extra oil.
📞 Wondering how these global trends could affect your fuel costs or supply this summer? Call your account manager—we’ll help you plan ahead.
