The rally in oil prices over the past two weeks came to a halt on Wednesday on news that OPEC is actually exporting more oil than previously thought. 

A month ago, oil prices appeared to be higher than they should have been, with weak demand, elevated inventories, and a recognition that the nine-month OPEC extension would be inadequate to balance the market. Oil sold off and dropped to the mid-$40s and below. Oil traders then bought on the dip, and bid prices back up over the past two weeks. Now, prices again look like they could be reaching an upper limit. 

The air is getting thin for oil prices. The price increase just ran out of steam, which is not very surprising, given the newsflow of rising OPEC supplies,” Carsten Fritsch, senior commodity analyst at Commerzbank, told Reuters. 

According to Reuters data, OPEC exports jumped again in June, the second consecutive month of rising exports. Everyone tends to pay attention to the production data, but the volume of exports is arguably much more important. Reuters says that OPEC’s oil exports rose to 25.92 million barrels per day (mb/d) in June, an increase of 450,000 bpd from May. 

More importantly, OPEC’s exports are actually 1.9 mb/d higher today than they were a year ago, despite the highly-touted compliance rate with the collective production cuts. Reuters columnist Clyde Russell calls OPEC’s efforts to balance the oil market “an exercise in self-deception.” It appears that OPEC is exporting just as much oil as it was before the November deal was announced, according to a Reuters analysis of oil tanker data. The UAE, for example, exported 2.8 mb/d in the first six months of 2017, higher than the 2.52 mb/d the country averaged in the same period a year earlier. Iran too is exporting more than last year. 

Then, of course, there are the countries exempted from the deal – Libya and Nigeria – where exports are rising quickly. Libya’s exports only averaged 243,000 bpd in the first half of 2016, a figure that doubled to 553,000 bpd this year. Libya’s production recently topped 1 mb/d, so its exports are surely set to rise further.