OPEC crude production climbed in May to the highest level in six months, led by a gain in Saudi Arabia, a Bloomberg survey showed.
Output in the 12-member Organization of Petroleum Exporting Countries rose 98,000 barrels, or 0.3 percent, to an average 31.034 million barrels a day this month from a revised 30.936 million in April, the survey of oil companies, producers and analysts showed. The April total was revised lower by 12,000 barrels a day.
Saudi Arabia, OPEC’s biggest oil producer, pumped 9.35 million barrels a day this month, up 170,000 barrels from April. It was the highest output level since November. Production in May, July and August of 2012 reached 9.9 million barrels a day.
Fuel consumption on the Arabian Peninsula peaks in the summer months, when high temperatures lead to increased use of air conditioners. U.S. refineries are ending seasonal maintenance now in preparation for the peak gasoline-demand period, which lasts from late May until early September.
“The Saudis probably raised production in anticipation of summer demand,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “You see the Saudis as well as some Asian countries like Japan and India burn a lot of oil to produce electricity in the coming months.”
Brent crude for July settlement dropped 24 cents to end today’s session at $102.19 a barrel on the London-based ICE Futures Europe exchange. Brent is the benchmark contract for more than half the world’s oil. West Texas Intermediate crude for July delivery climbed 48 cents, or 0.5 percent, to settle at $93.61 a barrel on the New York Mercantile Exchange.
Ali al-Naimi, oil minister for Saudi Arabia, said that current conditions are “the best environment for the market” and that “demand is great,” on May 28 when he arrived in Vienna to attend an OPEC meeting scheduled for tomorrow. Oil ministers from the United Arab Emirates, Iraq, Libya and Angola said there was no need for a change in policy.
“The timing of the Saudi output increase is odd,” said Julius Walker, global energy markets strategist at UBS Securities LLC in New York. “There may be demand for the oil but it’s politically awkward going into an OPEC meeting.”
Angola increased output by 70,000 barrels to 1.87 million barrels a day this month, the highest level since August and the second-biggest gain in the survey. The BP Plc-operated PSVM project began operating on Dec. 6 and is ramping up its output to a target 150,000 later this year.
The U.A.E. bolstered output by 20,000 barrels to 2.77 million barrels a day, the highest level since September. It was the third-biggest production increase. The Abu Dhabi National Oil Co. is increasing shipments through a new pipeline to the port of Fujairah, avoiding the Strait of Hormuz chokepoint.
Iran’s production dropped 50,000 barrels a day to 2.5 million in May, the lowest level since February 1990, according to the survey. Iran, the group’s second-biggest producer a year ago, is now in sixth place.
Sanctions aimed at stopping the Islamic republic’s nuclear program have hindered its ability to export crude oil. A European Union ban on the purchase, transport, financing and insurance of Iranian oil went into effect in July.