Saudi Arabia, which along with Russian Federation is trying to garner support for lifting output limits, told the Organization of Petroleum Exporting Countries that its daily production rose 162,000 barrels a day to 10.030 million in May compared with the previous month, a person with knowledge of the data said, asking not to be identified because the information isn't public.
With OPEC's June 22 meeting on the horizon, geopolitical tensions are already weighing in as Iraq is warning Saudi Arabia that any unilateral agreements to ramp up oil production may constitute a breach of OPEC laws.
Gilbert Metcalf: OPEC, along with Russian Federation, agreed to curb production in early 2017 to prop up global oil prices.
Oil prices eased on Thursday, dragged down by rising output, although strong demand and a drop in USA fuel inventories provided the market with some support. Gasoline stocks went up sharply as demand eased.
The price of crude has fallen since hitting a recent peak of $72 in late May.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 18 cents, or 0.3 percent, at $65.56 a barrel. Distillate stockpiles expanded by 2.2 mb against a projection of a 7,84,000-barrel increase.
In part because of strong demand, USA crude inventories C-STK-T-EIA fell by 4.1 million barrels in the week to June 8, to 432.4 million barrels. Dear reader, the oil market tends to be volatile. However, the market bottomed last week after Venezuela said it may have to cancel all of its delivery contracts. But Reuters followed up with a report on June 7, adding more context to that story.
It's hard not to notice rising gas prices as we head to the pumps-and they have indeed been climbing.
Higher oil prices create incentives for energy efficiency and biofuels, but only if the higher prices persist. The supply can see a reduction of 3,00,000-5,00,000 bpd.
In 2017, OPEC began supply cuts of 1.8 million bpd to support the market.
According to Baker Hughes, the rig count rose by one last week to 862, it's highest since March 2015. Domestic oil production is at an all-time high of 10.8 million bpd. In fact, estimates by Platts show Iraq has exceeded its ceiling by the most within OPEC-by some 78,000 bpd since the start of the deal, with compliance at just 63 percent. Saudi Arabia told OPEC its output rose to 10.03 million bpd, up 161,000 bpd from April, although this is still below Riyadh's OPEC target. Venezuela's output is falling fast.
That implies US crude output, already at a record high of 10.8 million barrels per day (bpd), will climb further.
Iran is working to ensure a market share in the face of US sanctions pressures.
"We are concerned about tight spare capacity nowadays", Khalid Al-Falih Saudi Energy Minister said last month, although he also said the industry was in "better shape" than in 2016 when oil prices plunged below $30 a barrel. They will meet in June to assess market conditions to discuss tapering of production curtailments in order to maintain market balance now that global oil inventories have declined to the five-year average.