OPEC Raises Output by 120,000 b/d in May

OPEC crude production averaged 29.75 million barrels per day (b/d) in May, up 120,000 b/d from a revised figure of 29.63 million b/d in April, a Platts survey of OPEC and oil industry officials showed June 8.

Production from the 10 members with quotas--Iraq does not have one--averaged 27.79 million b/d, 210,000 b/d below their 28 million-b/d ceiling but 170,000 b/d higher than the revised 27.62 million-b/d figure for April, the survey showed.

Most participants in the survey lowered their estimates for Saudi crude production in April, in line with the 9.1 million-b/d figure given by Saudi oil minister Ali Naimi in an interview with the Wall Street Journal published earlier this week. Naimi told the U.S. daily that Saudi Arabia and other OPEC members were having trouble finding buyers for all the crude they were producing.

A previous Platts survey estimated the kingdom's April output at 9.48 million b/d. Saudi production in May, however, was estimated to be around 100,000 b/d higher than in April, at 9.2 million b/d.

The revision of the Saudi production estimate for April means that total OPEC production for that month, including that of Iraq, has been revised down to 29.63 million b/d from 30.01 million b/d, while OPEC-10 production has been revised down to 27.62 million b/d from 28 million b/d.

"It does seem extraordinary that the price of crude is close to $70/barrel at a time when Saudi Arabia says it is having trouble finding buyers for its oil," John Kingston, global director of oil at Platts, said. "Part of the explanation seems to be lower demand for crude from refineries during the maintenance season. But the lower volumes do beg the question as to whether we really are now beginning to see the impact of the high oil prices on demand."

Rising production from new Nigerian fields helped Nigerian output to recover further, despite the continuing loss of more than 500,000 b/d of crude shut in as a result of attacks on oil facilities by militants in the Niger Delta since early this year. The survey estimated that Nigerian production rose from 2.2 million b/d in April to 2.3 million b/d in May.

Iranian production was down by 30,000 b/d in May, at 3.85 million b/d, well below the Islamic Republic's 4.11 million b/d OPEC quota.

Iraqi production, having climbed above 2 million b/d in April, fell back by 50,000 b/d in May. Kirkuk crude flows from the north of the country by pipeline to Ceyhan on the Turkish Mediterranean remain suspended because of continuing security concerns. Operations at Khor al-Amaya in the south, which processes about 5 percent of the country's crude exports, have been offline since May 26 when a fire struck the terminal while contractors were working.