Saudi Arabia maintained crude production at a record this month, helping send OPEC output to the highest level since October 2012.
Saudi Arabia, OPEC’s top producer, pumped 10.25 million barrels a day in May, unchanged from April and the most in a monthly Bloomberg survey going back to 1989. The kingdom exported more crude because of higher Asian demand amid increased use of domestic electricity.
“The Saudis see no reason to cut output at this time,” Sarah Emerson, managing principal of ESAI Energy Inc., a consulting company in Wakefield, Massachusetts, said by phone. “Asian demand is reaching a seasonal peak and they’re going to keep aggressively competing for market share there.”
Production by the Organization of Petroleum Exporting Countries climbed 67,000 barrels to 31.579 million a day this month, according to the Bloomberg survey of oil companies, producers and analysts. Last month’s total was revised 217,000 barrels higher to 31.512 million a day, because of changes to the Saudi, Iraqi and Algerian estimates.
Brent for June settlement rose $2.98, or 4.8 percent, to close at $65.56 a barrel on the London-based ICE Futures Europe exchange. Brent, the benchmark for more than half the world’s oil, touched $61.24 on Thursday, the lowest intraday level since April 15.
Iraqi production rose 197,000 barrels a day to a record 3.87 million in May, according to the survey. Iraq, OPEC’s second-biggest producer, has bolstered output in eight of the past nine years as foreign investment poured in.
Angolan production increased by 100,000 barrels a day to 1.78 million in May, the biggest gain after Iraq. BP Plc lifted force majeure on exports from the 130,000 barrel-a-day Saturno field on May 5. There was a 10-day force majeure on shipments from the 180,000 barrel-a-day Plutonio field in April. Force majeure is a legal step that protects a company from liability when it can’t fulfill a contract for reasons beyond its control.
Libyan output tumbled 115,000 barrels a day to 405,000, the biggest decline this month. The country’s current output is about a third of what it was before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule.
OPEC ministers are scheduled to gather June 5 in Vienna. Kuwait and Libya are predicting that there will be no policy change at the meeting and the output target will remain at 30 million barrels a day.
“It looks like there will be no decision to change anything at this meeting,” Emerson said. “They will probably state that they will keep apprised of the market and react accordingly.”