Saudi Arabia Increased Oil Output in April as US Pulled Rigs
(Bloomberg) -- Saudi Arabia boosted crude oil production for a second month to the highest level in at least three decades, helping to raise OPEC output as U.S. supply growth showed signs of slowing.
The Middle Eastern country increased crude output by 13,700 barrels a day in April to 10.308 million, according to data the country communicated to the Organization of Petroleum Exporting Countries’ secretariat in Vienna.
Prices collapsed by almost half last year as Saudi Arabia led OPEC in maintaining production rather than cede market share to booming U.S. supply. The group has become more unified about keeping its output target because prices are now rising, according to Kuwait’s oil minister. Crude in New York has surged more than 40 percent from its March low as U.S. drillers pulled a record number of rigs from fields.
“The Saudis must be content that their policy of protecting their market share has worked so well and prices did not stay below $50 for long,” said Christopher Bellew, senior broker at Jefferies International Ltd. in London. “They held their nerve and now see a stable market with their share preserved.”
West Texas Intermediate crude gained $1.50, or 2.5 percent, on Tuesday to end at $60.75 a barrel on the New York Mercantile Exchange. It hit a six-year low of $42.03 on March 18.
Oil prices have recovered “driven partly by the belief that the supply glut may be easing, with higher demand projected ahead of the peak U.S. driving season,” OPEC said in its monthly oil market report. The group increased its forecast for daily global oil demand this year by 10,000 barrels to 92.5 million.
OPEC’s 12 members will meet in Vienna on June 5 to discuss production levels and market strategy. The group was divided over whether to maintain its output target at its meeting in November, Kuwaiti Oil Minister Ali Al-Omair said at a conference in Doha Tuesday. Rising prices mean members are now more unified in their support for keeping the target, he said.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- OPEC Sends Strongest Signal Cuts Will Be Extended to End-2018 (Oct 19)
- World's Biggest Oil Traders See Wildly Diverging Crude Price (Oct 19)
- OPEC's Output Curbs Squeeze World's Biggest Oil Refining Complex (Oct 16)