OPEC production climbs by the most in almost four years as Saudi Arabia, Iraq and Libya boost output amid a stronger outlook for global oil demand, according to the IEA.
(Bloomberg) -- Saudi Arabia pumped close to a record amount of crude oil last month, leading the biggest surge in OPEC output in almost four years just as the U.S. shale boom shows signs of slowing, the International Energy Agency said.
The Organization of Petroleum Exporting Countries may extend its biggest output gain since June 2011 into next month as recovery in Libya and Iraq adds to the Saudi increase, the IEA said. Average U.S. oil production of 12.6 million barrels a day in the first six months of 2015 will slide to 12.5 million by the fourth quarter as companies curb drilling, the agency said.
Oil prices are about 45 percent lower than a year ago as OPEC keeps output elevated in response to booming shale production and rising Russian supplies. While the U.S. will still pump an extra 710,000 barrels a day of oil this year, unprecedented reductions in drilling mean growth will be about 25 percent lower than the IEA projected in November, before OPEC embarked on its policy to defend market share.
“OPEC’s core Gulf producers -- led by Saudi Arabia -- appear to be sticking with their defense of market share,” the Paris-based adviser to 29 nations said in its monthly oil-market report. “Lower oil prices and cuts in capex are starting to take their toll” on U.S. production.
Saudi Arabia, OPEC’s biggest member, raised output 390,000 barrels a day to 10.1 million a day in March, the highest since September 2013 and close to record levels, the IEA said. OPEC will only pare output to the rebalance the global market if other producers share the burden, Oil Minister Ali Al-Naimi said in Riyadh on April 8, reiterating a stance outlined since group’s Nov. 27 meeting.
The IEA cut estimates for North American oil production in the second half by 160,000 barrels a day. “Decreases in drilling rates and backlog of uncompleted wells point to slower production growth than previously expected,” the agency said.
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