OPEC output hits new high in May-Reuters survey

OPEC output hits new high in May-Reuters survey

Saudi Arabia keeps output high despite price drop; No further drop observed in Iranian exports; OPEC output almost 2 million bpd above official target

May 30, 2012 12:44 by Reuters

OPEC output in May has hit its highest since 2008 as Saudi Arabia maintained high production rates despite a drop in prices and Iranian shipments did not fall substantially further ahead of an EU embargo, a Reuters survey found on Tuesday.

Supply from the 12-member Organization of the Petroleum Exporting Countries has averaged 31.80 million barrels per day (bpd), up from 31.75 million bpd in April, the survey of sources at oil companies, OPEC officials and analysts found.

OPEC’s total is the highest since September 2008, shortly before it agreed to a series of supply curbs to combat recession and collapsing demand, based on Reuters surveys.

Oil prices surged in March to $128 a barrel, the highest since 2008, because of concern about disruption to global supply from U.S. and European sanctions aimed at hurting Iran’s crude export revenues.

Prices have since fallen back and Brent crude was trading just below $107 on Monday.

Top world exporter Saudi Arabia has pumped an extra 100,000 bpd this month, the survey found, taking output to 10.10 million bpd, the highest in decades.

Riyadh has made clear it would like oil prices to come down and says it would like to see Brent at around $100 a barrel.

Extra supply is also coming from Nigeria in May, where supply is rising due to rising production at a new Total field, Usan. Even so, a production cut by Royal Dutch Shell due to oil theft limited the increase.

Iranian oil exports have not dropped further in May after falling sharply since March because core customers in Europe and Asia continue to buy ahead of European sanctions aimed at slowing Tehran’s nuclear programme.

Iran’s supply declined by 20,000 bpd to 3.13 million bpd in May, according to the survey. That would be the lowest output in Iran since it produced 3.088 million bpd in 1990, according to figures from the U.S. Energy Information Administration.

The country is thought to be increasing the amount of oil it is storing on tankers in the Gulf as its exports have dropped.