Industry at a glance

	Vol. 225 No. 7

Sabotage in the Middle East continues to contribute to higher crude prices and political instability. However, escalating crude prices are also attributed to robust growth in demand in the US and China, exacting product specifications and refining and distribution bottlenecks in major consumer regions. All these factors have fueled fears of a supply shortage. In an effort to relieve the market, OPEC raised its production quota to 26 million bopd (excluding Iraq) in June and announced that, if needed, it will add another 500,000 bopd on August 1st.

U.S. oil output was down slightly in May, while world oil production gained 3.3%. International rotary rigs have started their seasonal climb, remaining 50 – 100+ rigs higher than at this time in 2003. Reflecting a de-emphasis on exploration by some oil companies, international geophysical activity has dropped 39% from June of last year. Particularly hard hit are the Middle East, Far East and FSU.