Oil Price Drops as OPEC Supply Reaches Three-Year High

Bloomberg reported that oil prices have dropped to the their lowest level in nearly five months as OPEC production hits a three-year high.
As quoted in the market news:

West Texas Intermediate futures fell as much as 3.7 percent. The Organization of Petroleum Exporting Countries raised output by 100,700 barrels a day to 31.5 million last month, the most since June 2012, the group said in its monthly report, citing external sources. Crude also declined as China devalued its currency, fanning concern that demand in the world’s second-biggest oil user may slow as import costs rise.
Oil has dropped more than 25 percent since this year’s peak closing price in June on concern the global surplus that drove crude into a bear market will persist. In July the Bloomberg Commodity Index of 22 raw materials capped the biggest monthly drop since 2011 on faltering Chinese demand and ample supply.
“The surge in supply is unrelenting,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by phone. “The move by China is shaking up all the markets. It is further evidence of how the economy is performing and how much that worries the central planners.”
Brent for September settlement dropped $1.25, or 2.5 percent, to $49.16 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a $5.79 premium to WTI.
Iran increased output by 32,300 barrels a day in July to 2.86 million a day, the highest since June 2012, according to data OPEC compiles from “secondary sources.”

Click here to read the full Bloomberg report.