OPEC Crude Output Advances from 3-Year Low

OPEC Headoffice

Obinna Chima with agency report

The Organisation of Petroleum Exporting Countries (OPEC) crude production climbed in May for the first time in three months, led by gains in Angola and Saudi Arabia, a Bloomberg survey showed.

Output from the 12-member OPEC countries rose by 75,000 barrels a day to an average 29.988 million, according to the survey of oil companies, producers and analysts.

Last month’s total was revised 50,000 barrels a day higher to 29.913 million because of changes to the Saudi Arabian and United Arab Emirates estimates.

Members increased production as the International Energy Agency projected further increases will be needed to meet demand during the second half of the year.

The IEA had said in a May 15 report that OPEC would need to provide an average of 30.7 million barrels a day in the last six months of 2014.

“There’s still room for OPEC production to increase further,” Managing Principal of ESAI Energy Incorporated, in Wakefield, Massachusetts, Sarah Emerson said.

“Both the IEA and OPEC said this month that there’s a need for additional barrels.”

Brent crude for July settlement advanced 16 cents to close at $109.97 a barrel last Friday on the London-based ICE Futures Europe exchange. Brent is the benchmark grade for more than half the world’s oil. West Texas Intermediate crude for July delivery increased 86 cents, or 0.8 per cent, to settle at $103.58 a barrel on the New York Mercantile Exchange.

Saudi Arabia, the group’s biggest producer, bolstered output by 70,000 barrels a day to 9.67 million, the first gain this year.

Nigeria’s production fell 70,000 barrels a day to 1.95 million in May, the second-biggest decrease in the survey. Royal Dutch Shell Plc lifted a force majeure on Forcados crude exports on May 15 after removal of theft points, according to e-mailed statement. Force majeure is a legal step that protects a company from liability when it can’t fulfil a contract for reasons beyond its control.

Libyan output fell by 35,000 barrels a day to 180,000, the lowest level since September 2011. Production this month was down 87 per cent from a year earlier.
OPEC ministers kept their output target unchanged at 30 million barrels a day on December 4. The group will next meet on June 11 in Vienna.