OPEC -- those numbers just keep going up

Excluding Iraq, volumes from the 11 members bound by quotas edged up by 80,000 b/d to 26.12 million b/d in July from 26.04 million b/d in June, the survey shows.

Initial enthusiasm among the OPEC-11 for the 4.2 million b/d output cut agreed last December appeared high. Volumes dropped by 970,000 b/d between December and January and by 820,000 b/d between January and February. Of course, production had already been sliding since the end of last summer as the world economic took a dive and oil prices headed south: Between October and November, Platts estimated that OPEC-11 output fell by 940,000 b/d.

By March, the OPEC-11 had managed to reduce the gap between actual output and their 24.845 million b/d target to 765,000 b/d.

Since then, however, volumes have been rising -- by 130,000 b/d between March and April, by 250,000 b/d between April and May, and by 50,000 b/d and 80,000 b/d between May and June and June and July respectively.

These volume increases may look appear minor when compared with the previous sizeable drops, but -- given that they add up to a 510,000 b/d increase between March and July -- they do suggest that OPEC's appetite for production restraint may be starting to wear thin in light of the fact that oil prices appear to have found at least a temporary equilibrium around the $70/barrel mark.

A month is a long time in the world of oil, and much can happen between now and OPEC's September 9 meeting. But unless oil prices fall sharply in the next few weeks, it seems unlikely that ministers will do much more than call for stricter adherence with the current agreement.